Mexico publishes LPG price cap methodology

Spanish Market: LPG
30/07/21

Mexico's energy regulatory commission (CRE) sent its proposed methodology to cap retail LPG prices to the regulatory improvement agency (Conamer), a necessary step before any law is published in the official gazette.

The methodology, which could be published as soon as tomorrow in Mexico's official gazette, uses a formula that adds an average sale price, a logistics cost, a profit margin and a K-factor. The average sales price will be taken directly from what retailers report to the CRE.

The CRE will divide the country into 145 regions, the same that were used before price caps were lifted in on 1 January 2017. The CRE will publish the weekly maximum prices for each region every Saturday, which will be valid starting the next day, Sunday.

The CRE justified the price caps using arguments from a study conducted by the competitive watchdog (Cofece) in June 2018, as well as citing accusations of possible malpractice and monopolistic activities made by the Cofece to the CRE. But it made no reference to Cofece's more recent calls, made just yesterday, to stop the price cap plan, or of warnings that capping LPG prices might end up hurting consumers even more.

The CRE today at 6:30pm ET held an extraordinary plenary session with all of its commissioners in which it approved the methodology.

Historically, and by law, new rules need to be sent to Conamer for a public comment period. But the current administration has full control of Conamer, leading critics to accuse it of no longer acting as an independent entity and more like a rubber stamp in the process of changing laws in Mexico.

Alberto Montoya, former deputy director of the energy ministry (Sener) under Rocio Nahle, is the head of Conamer, which has granted exceptionally swift approvals to changes in energy law requested by Montoya's former boss.

The publication follows the request made by Sener to CRE to act immediately and formulate a price cap methodology, as high prices derived mainly from increases in international benchmarks have impacted the Mexican population.

But the process has skipped rules that require a review and ruling from Cofece that there are no competitive conditions in a market in order for the government to cap the price of any product.

By Sergio Meana

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23/12/24

Viewpoint: European large cargo propane to tighten

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WLGA calls for immediate action in African LPG roadmap

17/12/24

WLGA calls for immediate action in African LPG roadmap

The roadmap identifies 11 high-opportunity markets in sub-Saharan Africa where LPG consumption could significantly increase, writes Yasmin Zaman London, 17 December (Argus) — The growth of LPG as a clean cooking fuel in sub-Saharan Africa will remain limited without immediate and considerable advancement in regulation and investment, according to a new roadmap released by the World Liquid Gas Association (WLGA). The report, commissioned by the WLGA's recently formed Cooking For Life Africa Task Force (CFLA), calls for clear, enforceable regulatory frameworks, financing and payment plans to reduce cost barriers, and investment in infrastructure including roads to better support distribution. The roadmap identifies 11 high-opportunity markets in sub-Saharan Africa where under favourable conditions per capita LPG consumption could increase to 25kg/yr by 2030 and 40kg/yr by 2050. In seven markets, including Nigeria, Kenya, Ghana and Cameroon, policies are already in place that will drive growth opportunities, leaving four that need to address this challenge, according to the roadmap. Affordability is an issue in all countries except Ghana. In Nigeria, this is considered a "major roadblock" because of the depreciation of the naira. The roadmap was released after the UN's Cop 29 climate conference, where major European oil firms pledged $500mn to energy access in sub-Saharan Africa and south and southeast Asia. The WLGA established the CFLA at the IEA's summit on clean cooking in Africa earlier this year. Its founding members include TotalEnergies, Norway's Equinor, Nigerian state-owned oil firm NNPC, LPG trading firm Petredec and regional LPG distributor Oryx Energies. "The LPG roadmap, which targets about 60pc of the continent's population without access to clean cooking solutions, will simultaneously address economic, health and environmental challenges across Africa," NNPC's managing director Huub Stokman said. TotalEnergies' vice-president of LPG Biova Agbokou added that the CFLA and the roadmap can also act "as another lever to reach more end-users". Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: VLGC market faces uncertainties in 2025

16/12/24

Viewpoint: VLGC market faces uncertainties in 2025

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India's Gujarat Gas raises PNG prices in Morbi cluster

13/12/24

India's Gujarat Gas raises PNG prices in Morbi cluster

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US rail group optimistic about 2025 rail demand

12/12/24

US rail group optimistic about 2025 rail demand

Washington, 12 December (Argus) — US rail volume is likely to start strong in 2025, but railroads will need to navigate changing federal policies, the Association of American Railroads (AAR) said. Volume next year hinges on a few key factors, including the resilience of consumer spending, strength in the labor market, and the trajectory of inflation and interest rates, the group said. Railroads will need to remain vigilant as these economic indicators will be critical in helping assess rail traffic and broader economic health in the months ahead, AAR said. "Strong intermodal growth and stable consumer demand offers reasons for optimism," AAR said. "But railroads and the economy alike must navigate evolving policies and potential disruptions" as the US enters 2025 under a new administration, the group said. The AAR'S optimism comes as rail traffic in November "while by no means stellar, suggests that the broader economy remains on stable footing", AAR said. US intermodal rail volume set new records in November. The increase reflected strong consumer demand following job gains that pushed increased spending, AAR said. Intermodal traffic is made up primarily of consumer goods shipped in containers between different modes of transportation, although some scrap metal and specialty agriculture products ship this way. US railroads loaded an average of 282,000 intermodal containers and trailers per week, up by 11pc from a year earlier. That was the highest weekly average for any November since AAR began tracking intermodal data in 1989. Carload traffic fell by 3.8pc compared with November 2023. Carload traffic is primarily made up of commodities. Coal was the "biggest problem", AAR said. US railroads loaded 15pc less coal last month compared with a year earlier, while year-to-date loadings were down by 14pc from the same 11 months in 2023. If coal were excluded, monthly US carload traffic in November would have notched a 10th consecutive year-on-year increase. Industrial products volume was down by 1pc from a year earlier. Manufacturing is a major driver of US carload traffic, and that sector remains sluggish, AAR said. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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