Mexico cancels all Trafigura fuel
Trafigura's Mexico fuel import permits cancel -Energy Ministry
By Sergio Meana / Argus
Petroleumworld 09 22 2021
Mexico's energy ministry cancelled all five of commodity trader Trafigura's import permits that would have allowed it to continue to import refined products through 2038.
The permits were worth up to 381.5bn l (100.8bn USG) of regular and premium gasoline, diesel, and jet fuel from 2018-2038 — almost 5bn USG/yr, according to Argus calculations.
One of the five permits to import up to 63.3bn l of diesel through October 2038 has been suspended and is in the process of being terminated, based on the latest list posted by the energy ministry (Sener) yesterday. Trafigura's four other permits were labeled as suspended, and in the process of being revoked. They are worth 127.2bn l of diesel, 63.6bn l of regular gasoline, 63.6bn l of premium gasoline, and 31.8bn l of jet fuel.
The cancellation comes after energy minister Rocio Nahle recently said Pemex would not be involved with any company that has been accused of corruption without naming any firms directly.
Trafigura has been involved in a years-long corruption investigation in Brazil.
"We see no valid basis for the suspension of import permits for Trafigura Mexico," the company told Argus today. "Trafigura complies with applicable laws and regulations in the jurisdictions in which it operates, including Mexico."
Competing trader Vitol reached an agreement in May in the US to pay nearly $164mn in fines and restitution to settle charges that it won contracts by paying millions of dollars in bribes to officials in Brazil, Ecuador and Mexico. Mexico has said it launched its own investigation as well.
The Mexican government has promised to end corruption in Mexico, but there have been few high-profile formal charges or convictions. It is also on a drive to gain back market share for state-owned Pemex that it has lost since the energy reform of 2014.
Government efforts have included increasing regulation of private-sector participants, including cancelling many fuel import permits and the closure of fuel import and storage terminals for what market participants complain are paperwork violations.
US investors have complained with the White House, arguing that some policies and laws violate the US-Mexico-Canada free trade agreement (USMCA).
A spokesperson for the energy ministry was not immediately available to respond to a request for comment.
Private-sector companies have fuel storage projects worth at least $1.5bn under development. Investors have added at least 8.2mn bl of fuel storage capacity at 12 terminals since Mexico's 2014 energy reform.