Photo: Energía a Debate

By THE PULSE NEWS MEXICO STAFF

Mexico’s Energy Secretariat (Sener) on Tuesday, July 27, ordered the country’s Energy Regulatory Commission (CRE) to put an emergency maximum ceiling on natural gas prices in the face of soaring consumer costs.

Sener gave the CRE just three days to establish a new pricing system that would guarantee affordable access for all consumers.

In the last 12 months, the cost of natural gas in Mexico increased by 30 percent, 5.2 times the rate of overall inflation, leaving many lower-income families economically strapped, according to the National Institute of Statistics and Geography (Inegi).

The spiraling cost of natural gas also led to Mexico experiencing a record 5.8 percent inflation in June.

Notwithstanding, the Sener ruling comes in direct violation of Article 82 of Mexico’s 2014 Hydrocarbons Law, which specifically states that, as of January 2017, natural gas prices are to be determined according to market conditions.

The Energy Secretariat justified the decision based on the fact that most Mexican households depend on natural gas for both their cooking and hot-water needs, thus it is an essential product and subject to government price controls.

The measure was announced in parallel with an order last month by President Andrés Manuel López Obrador (AMLO) to create a state-run natural gas distribution company to sell gas cylinders at subsidized prices.