Gasoline retailers and other private companies are effectively being required to purchase fuel from the state oil company Pemex because the federal government isn’t renewing import permits and has shut down some privately owned fuel storage terminals.

Two experts cited by Reforma said that the Energy Ministry (SENER) isn’t renewing private companies’ fuel import permits when they expire. The newspaper reported that there were just 88 valid import permits as of February 1, whereas there were over 1,000 in December 2018.

Alicia Zazueta, director of the oil sector firm eServices, said that several more permits will expire this month.

Gas station chain Total México, energy infrastructure company IEnova and Toyota are among the companies whose permits will expire this year. Permits to import gasoline, diesel, fuel oil and aviation fuel are all at risk of not being renewed, Zazueta said.

SENER’s refusal to renew the permits has left foreign companies “very disappointed,” she said, adding that the situation affects their growth strategies in the Mexican market.

Zazueta said that there will be less investment in the retail fuel market as a result of the ministry’s rejection of import permit extensions.

“The [energy] market is actually closing completely to Pemex and the Federal Electricity Commission,” she said.

The government is also pursuing an electricity reform that would guarantee 54% of the market to the state-owned utility.

Zazueta said that companies’ inability to import fuel will affect consumers because there will be less competitiveness between gas stations.

Mauricio León, an associate with the law firm Sánchez Devanny, said that in addition to not renewing existing permits, SENER is not granting any new ones.

BP and Vitol are among the companies without valid import permits, he said, adding that the companies’ inability to bring fuel into the country will eventually lead to shortages.

Further complicating some companies’ situation is the closure of their fuel storage terminals by the Energy Regulatory Committee. Three privately owned facilities were shut down in August and September last year.

One affected company is Houston-based Monterra Energy, which announced Monday that it will sue Mexico for US $667 million.

With reports from Reforma