Non-Pemex imports of refined products into Mexico are facing more bureaucratic delays in recent weeks, according to shippers, with customs officials putting holds on diesel cargoes in particular.
Excessive delays in customs have been long been a complaint among Mexican importers. One private-sector Mexico City-based importer said he had to move away from truck deliveries to rail in order to see fewer delays.
But two other market participants tell Argus the delays have worsened in recent weeks as the country's demand has fallen and fuel storage has filled. Customs agents at times hold refined products for not meeting quality specifications or not being identified correctly for taxes — long a source of concern in Mexico. But some of the recent holds have been less substantiated, the sources said.
One waterborne cargo, most likely diesel, was recently held up at the Tuxpan port for one month by customs delays, a Mexico City-based private importer not part of that company said.
Neither Mexico's tax authority (SAT) — which has authority over customs — nor the energy regulatory commission (CRE) responded to requests for comment.
Private-sector companies have gained market share of the country's fuel import and retail sector after the 2014 energy reform, although President Andres Manuel Lopez Obrador has said he wants to reverse this trend and eventually make Mexico self-sufficient in fuels.
The increased delays come as state-owned Pemex has also increased production of diesel and gasoline, gaining some market share from private importers.Pemex increased its gasoline production in May by 1.7pc and its diesel production by 6.5pc from May 2019.
The more frequent bureaucratic delays also are occurring at a time when Mexican storage is full, preventing offloading of cargoes. In mid-May up to 15 tankers sat offshore in the Pajaritos port because of discharging delays provoked by nearly full storage terminals, given the lower fuel consumption in the middle of Covid-19-related curtailments. Two clean tankers, the Velos Fortuna and Hafnia Andromeda, which were floating off the west coast of Mexico for almost two months only recently offloaded, according to data from oil analytics firm Vortexa.
Even larger international firms that have their own retail networks in Mexico have seen long customs delays in both waterborne and rail shipments, a separate service provider said. Several retailers did not respond to requests for comment.
Brakes on import permits
Importers are also seeing a decline in the number of permits granted to be able to import product, with one Mexican fuel trader saying permit renewals seem to be harder to get every time.
"We have not imported less," he said. "But we have definitely seen more administrative juggles."
There are currently 179 valid fuel import permits — 89 for gasoline, 56 for diesel, 13 for jet fuel and 21 for LPG. This is 15pc fewer than the 211 import permits that were valid as of March and 25pc less than the 238 valid fuel import permits at the end of 2019, according to Argus calculations, based on the fuel import permit lists.
Most permit are valid for one year now, but some companies prior to this current administration have 20-year permits that expire in 2038.
The government is also exercising extra pressure on compliance. Even minor clerical errors can lead to accounts being frozen or other issue, said Diego Campa, a partner with the law firm of Dentons Lopez Velarde.
"They are taking many import permits and leaving only the ones for companies that are willing to invest in infrastructure," said Campa. "There is certainly pressure exercised by the government to return market share to Pemex."
By Carla Bass and Sergio Meana
