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Economíahoy.mx
One of the great promises of energy reform has been the decline in fuel prices, derived from the opening market and competition. However, these have not stopped growing.
From 2017 to date, Mexicans have experienced an average 26% increase in this hydrocarbon, which means that consumers pay about 80 pesos more for a 20-kilo cylinder. In a country where seven out of ten people use liquefied petroleum gas (LPG) for their daily consumption, why and how was the promise broken?
According to Alejandra Palacios, head of the Federal Economic Competition Commission (Cofece), the promise to lower energy prices has been wrong It refers to the market for liquefied petroleum gas, the absence competition did not help much, "he said in an interview.
Cofece is the market regulator in Mexico and recently opened a sector investigation for alleged monopoly practices. certain competitors could enter into contracts, agreements or arrangements to fix the prices of products, services or manipulate supply and demand.
In Mexico, it is not uncommon for a colony to be unable to purchase propane gas. . Tank dealers have defined territories and expressly prohibit selling outside of these boundaries or they will be sent back or beaten.
The consumer is obliged to perform a leap of faith when he buys gas. He expects the cylinder to actually contain the 20 or 40 liters that he pays, and he suspects that his stationary gasoline tank reaches him to make ends meet. In addition, there are regions where only one provider exists.
"What should have been said is that prices are at their best, and if the international price of the molecule goes up, in Mexico it can not go down unless we want to that someone subsidizes our liquefied petroleum gas .In the logic of the lack of subsidies, what we want is to pay the best possible price, "Palacios said.
Before the liberalization of the price of LPG it was controlled by the Mexican authorities, but now they are subject to international and seasonal reference price, in addition to logistics and transport costs are already recognized.
Palacios commented that, although the market was released, there is little competition and in some parts of the country, levels of concentration are increasing
He said the best possible price is obtained with the sum from someone who buys the molecule cheaply, who introduces it to the country at an effective cost, which makes it move from hospitalization centers to distribution centers. profitable and that the sale to the public faces competition and its sales margin is low.
According to the Energy Regulatory Commission (CRE), the average price per kilogram of liquefied petroleum gas per bottle, as at 11 January 2017, was 15.02 pesos, while in the last report it was 18.98 pesos, nearly 4 pesos more, so that for a 20-kilo cylinder, consumers pay 80 pesos more, but in some cities the increases exceed 40%.
"As long as there is efficiency and competition, the consumer will have access to the best possible price, that is, the approach with which the reforms should have been sold. " According to the study Transition to Competitive Energy Markets: GPL, prepared by Cofece, in 2017, 53% of the LPG distribution was concentrated in five economic groups, which meant a concentration. 5% more, since 48% in 2016.
The CRE explains 70% of the increase in the cost of LPG in 2017 on the grounds that the price of the molecule has increased and that the costs of import increased . In this regard, Alejandra Palacios said that despite an increase in international prices that had an impact on price, Mexicans continued to pay the same prices when prices fell.
Regional concentration. Concentration of liquefied petroleum gas market is developing regionally in fuel distribution, where Yucatan, Baja California and Pacific region are the areas with the lowest number of supply.
According to the commission's calculations, an increase in the number of competitors could reduce prices, and estimates that when in a region the number of distributors goes from one to two, prices may be 6.5% lower.
Fernanda Ballesteros, coordinator of the regulatory and economic competition sector of Mexico, Evalúa-CIDAC, said that it was a period of adjustment to the new rules and explored the causes that could influence prices, both propane gas and gasoline.
"The idea is to improve the environment and to generate the conditions for there to be greater competition, not only to establish the laws, but to ensure that there is more competition. ensure that they are respected and try to ensure that the implementation is the most appropriate, "he said.
He said that competition puts pressure on those who offer a product because they know that if they do not do it the best way, consumers can go with them.
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