Permit Holders Concerned Over CRE Fines

CRE has issued warnings to permit holders of gasoline, diesel, natural gas, and LP gas outlets, signaling potential million-dollar fines for non-compliance with transfer-of-rights obligations. At least 700 permit holders have failed to fulfill these obligations.

Marcial Díaz Ibarra, President, Association of Regulators of the Energy Sector (ARSE), explained that some permit holders have committed irregularities, such as incomplete insurance policies or delayed operational information submission, to transfer rights. CRE published in January of this year an agreement offering a regularization procedure for non-compliant permit holders. However, adherence to this agreement requires a financial fine acknowledgment.

The fines outlined by the Hydrocarbons Law range from 7,500 to 150,000 minimum wages, which could potentially amount to between MX$1.866 million (US$110,658) and MX$37 million, reports El Financiero. This poses a significant financial burden for permit holders, although adherence to the agreement may be more economical than permit revocation, as stated by Beatriz Marcelino, President, Association of Energy Distributors and Retailers (ADEE).

To encourage compliance, permit holders have until March 31 of this year to join CRE's regularization program. While this offers a path to maintain service to consumers and foster a positive relationship with federal authorities, ongoing CRE inspection visits raise concerns among permit holders about additional sanctions or permit revocations.

ADEE previously criticized CRE for disproportionately revoking permits, even for minor non-compliance issues that warrant fines rather than revocations. They emphasized the complexity of obtaining new permits and initiated nullity trials to challenge these decisions, highlighting the need for justified regulatory actions.

Despite the challenges, permit holders view CRE's agreement as an opportunity to advance sector regularization and maintain operational continuity. However, the ongoing scrutiny from regulatory authorities adds uncertainty to the process, potentially prolonging economic and operational disruptions for affected companies.

According to Ramón Silva Arizabalo, Secretary of Energy Development, Tamaulipas, there are over 500 permit processes in progress, with some stalled and others only halfway completed. "The objective is to regularize them; many are underway, and the aim is to provide guidance to ensure that things progress as they should and that the procedures are resolved as promptly as possible," he stated, emphasizing that these stalled procedures represent a significant amount of investment held up.