Private distributors of LP gas will face government competition. Private distributors of LP gas will face government competition.

AMLO announces new state-owned company will distribute LP gas ‘at fair prices’

The president said gas prices are 'unjustifiably' high

The federal government will create a new state-owned company to distribute LP gas directly to consumers, President López Obrador said Wednesday.

The state oil company Pemex will establish the new utility within three months, he told reporters at his regular news conference.

“We’re already preparing the creation of a company to distribute gas at fair prices. It’s going to be called Gas Bienestar [Well-Being Gas],” López Obrador said.

“It’s going to sell cylinders of 20 to 30 kilos of gas at low prices … without these other private companies ceasing to participate [in the gas market]. But there’s going to be competition because there isn’t [now],” he said.

The president said the price of LP gas – which most Mexican households use for cooking – has been rising “unjustifiably” above inflation, which is 3.15%.

Data from the consumer protection agency Profeco shows that LP gas prices have risen more than 30% in some parts of Mexico over the past year.

López Obrador said his government has kept its commitment to keep price rises for gasoline and electricity below the level of inflation but has been unable to do the same with LP gas.

López Obrador blamed five large distribution companies, which he didn’t name, for gas price hikes and asserted they have “very high profit margins” as a result.

“Pemex sells [gas] to them at a price and they sell it to the consumer at a very high price,” he said.

The president said distribution by the new state company will begin in Mexico City, where he said prices are particularly high. Gas Bienestar will have very low profit margins, allowing it to keep LP gas prices low, he said.

López Obrador, a staunch energy nationalist, is also aiming to increase the state’s participation in the electricity and oil sectors, which were opened up to private and foreign companies by the previous federal government.

Mexico News Daily

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