Mexico Court Temporarily Suspends Part of AMLO’s New Fuel Law

(Bloomberg) -- A federal judge has temporarily suspended parts of a new law that would give the government greater control over the fuel market, according to a document seen by Bloomberg, dealing the latest blow to the president’s goal of dialing back the country’s historic energy reforms.

The temporary suspension pertains to parts of the law that enable the government to suspend fuel permits if it determines that they put national or energy security at risk. The suspension will be applied in general terms.

The bill approved by congress last month modifies Mexico’s hydrocarbons law by expanding state control over gasoline and diesel distribution, imports and marketing. In addition to giving the government greater freedom to suspend companies’ fuel permits, it also lets state-owned oil company Petroleos Mexicanos take over the facilities of companies whose permits have been suspended.

The court decision is the first in what is expected to be a series of legal battles waged by the private sector against the new legislation, similar to a bill that has prioritized state utility Comision Federal de Electricidad, or CFE, in the power market.

Since reaching power in late 2018, President Andres Manuel Lopez Obrador has fought against 2013-2014 energy reforms that ended almost eight decades of state monopoly and lured investments from Royal Dutch Shell Plc, Chevron Corp. and a number of other companies. The changes in fuel market rules are the latest move by the nationalist president to roll back those reforms.

©2021 Bloomberg L.P.