News
24/04/25
Valero's Mexico fuel import permit reinstated: Update
Include market comments, details of Valero operations in Mexico. Houston, 24
April (Argus) — Independent US refiner Valero said its permit to import fuel
into Mexico has been reinstated after being suspended earlier this month. The
temporary suspension was imposed by Mexico's tax authority SAT on 9 April as
part of the country's efforts to fight fuel smuggling, Valero said. The
suspension was lifted after the company reached out to stakeholders and customs
officials in Mexico and was "quickly exonerated of any wrongdoing," Valero said
Thursday morning during its first quarter earnings call. Valero on 23 April sent
a notice to customers in Mexico saying its import operations had resumed, but
the two-week stop disrupted supply in several regions. Some cities, like
Irapuato in Guanajuato state northwest of Mexico City, remain without product,
according to market sources. "Although this is all unfortunate and created
significant supply disruption for our customers, it is part of an effort in
Mexico to limit the import of illegal fuel," Valero chief financial officer Gary
Simmons said in the earnings call. Fuel smuggling is rampant in Mexico, with
illicit fuel sales accounting for up to 30pc of Mexico's 1.2mn b/d of gasoline
and diesel demand, according to finance ministry estimates. Most of the illicit
supply enters Mexico through mislabeling oil products at the US-Mexico border as
petrochemicals, additives or biofuels, which are not subject to excise taxes on
diesel and regular gasoline. Earlier this month Mexico stopped the movement of
all fuel trucks as part of fight against fuel smuggling. Valero top importer to
Mexico Valero is the largest private fuel importer in Mexico, operating an
extensive distribution network supported by its refineries in the US Gulf coast
and a system of terminals, pipelines, rail routes, truck routes and waterborne
logistics. Its fuel sales accounted for 10pc of Mexico's gasoline and diesel
demand on 9 April, according to the company. The company imports road fuels by
pipeline from its Corpus Christi and Three Rivers refineries in Texas to the
195,000 bl NuStar storage terminal in Nuevo Laredo, Tamaulipas. Valero's
waterborne fuel deliveries arrive at the 2.1mn bl Sempra terminal in Veracruz,
from which it supplies other terminals near Puebla, Mexico City and Guadalajara.
Valero stores fuel at four private-sector terminals in Mexico, with over 4mn bl
of capacity. The company is also expected to start storing fuel at the new 1.1mn
bl OTM maritine terminal in Altamira, Tamaulipas, in the near future. The
company operates a network of over 290 retail fuel stations in Mexico and also
supplies fuel to other retailers and fuel marketers. In Mexico Valero holds
gasoline, diesel and jet fuel import permits valid through 2038. Valero is one
of only a handful of private-sector companies with such permits, as Shell,
Marathon and ExxonMobil hold permits to import only gasoline and diesel.
Private-sector companies started importing fuel into Mexico in 2016 after the
market opened to more competition, but under former president Andres Manuel
Lopez Obrador's administration, the energy ministry (Sener) cancelled dozens of
fuel import permits. By Eunice Bridges and Antonio Gozain Send comments and
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