The new state-owned LP gas distribution company began operations in Mexico City on Tuesday.

Pemex CEO Octavio Romero announced that Gas Bienestar (Well-being Gas) would begin delivering 20 and 30-kilogram cylinders of gas in Iztapalapa, a sprawling, working class borough in the capital’s east.

“Mr. President, … on July 7 you announced the commencement of operations of the company Gas Bienestar in a period no longer than 90 days. Today, 55 days since your order, we’re officially beginning the company’s work,” he said at President López Obrador’s morning news conference.

Romero said Gas Bienestar, created as a new division of the state oil company, will soon begin operations in Azcapotzalco, Gustavo A. Madero, Milpa Alta, Xochimilco and Tláhuac and subsequently expand to other Mexico City boroughs.

Appearing via video link from Iztapalapa, Mayor Claudia Sheinbaum said Gas Bienestar will be operating in all 16 boroughs by January. Romero said the aim is to be delivering gas to 1.2 million Mexico City homes by that month.

That number of customers would give the new distributor 43% market share in the capital.

A three-day distribution trial that concluded Monday demonstrated strong demand for gas supplied by Gas Bienestar, with 98% of just over 9,500 available tanks sold.

Announcing the creation of the new state company last month, López Obrador said that gas prices were particularly high in the capital and for that reason Gas Bienestar would begin operations there before expanding to other parts of the country. Prices across Mexico have risen “unjustifiably” beyond inflation due to a lack of competition in the market, the president said.

But Gas Bienestar will sell LP gas – which most Mexican households use for cooking – at low prices, he pledged.

Romero said Tuesday the Pemex division will sell a 20-kilogram cylinder of gas for 400 pesos (US $20) this week while a 30 kilogram cylinder will cost 600 pesos. Those prices are almost 11% below this week’s price ceilings set by the Energy Regulatory Commission.

In addition to low prices, the Pemex chief outlined three other benefits of purchasing gas from Gas Bienestar. Firstly, every cylinder sold will contain exactly the amount of gas it should, Romero said.

“To guarantee that there is no milking from these tanks, they’ll have an airtight seal,” he said.

Secondly, Gas Bienestar will deliver gas in new cylinders and rehabilitate the old ones it collects by removing rust, changing their valves, painting them and labeling them with the state company’s logo, Romero said. Cylinders that can’t be rehabilitated will be removed from circulation, he said.

Thirdly, gas supplied by Gas Bienestar will last longer than other gas, the CEO claimed. “We’re taking care of the quality of the gas. We’ve done tests against other brands and the Bienestar gas has greater calorific power,” Romero said.

With reports from Milenio