Background on LPG Market in Mexico
The liberalization of the LPG market in Mexico, which lasted from 2016 to 2021, led to price increases due to a lack of competition. Under President Andrés Manuel López Obrador, the government shifted to a more restrictive approach, implementing maximum price controls for LPG.
These price controls have resulted in lower prices for consumers, but distributors claim that their profit margins have been reduced to an unsustainable level. The maximum price for LPG has dropped from around 27 pesos per liter in 2021 to approximately 13.30 pesos per liter in 2025, with a commercial margin of about 2.88 pesos per liter.
Current Negotiations and Challenges
Despite claims by Amexgas, led by Rocío Robles Serrano, that an agreement has been reached between the government and LPG distributors, no official confirmation has been issued. The ongoing dialogue aims to address the concerns of distributors who argue for a review of their shrinking profit margins.
The Secretaría de Energía, under Luz Elena González Escobar, continues to negotiate with all LPG distribution organizations. Distributors have expressed dissatisfaction with recent changes to the price calculation formula in the Diario Oficial de la Federación, which they claim were implemented without their input.
Distributors’ Perspective
LPG distributors argue that their profit margins are insufficient, leading to operational challenges and a growing illegal market. They have threatened nationwide strikes if their demands are not met.
Government Perspective
Authorities acknowledge the stabilization of LPG prices and the prevention of excessive increases, which has positively impacted inflation and ensured accessibility to the fuel. They maintain that the current approach balances consumer interests with distributor concerns.
Key Questions and Answers
- What are the main issues between the government and LPG distributors? The primary concern for distributors is the reduction in their profit margins due to maximum price controls. They argue that these narrowed margins, combined with operational challenges and a growing illegal market, threaten their business viability.
- What is the government’s stance on the situation? The Mexican government emphasizes the stabilization of LPG prices and its positive impact on inflation and consumer accessibility. They aim to balance these benefits with distributor concerns through ongoing negotiations.
- What recent changes have affected the LPG market? The government altered the price calculation formula published in the Diario Oficial de la Federación without consulting distributors, which has further reduced their profit margins.
Related Developments in Mexico
Recent Appointments in Mexico’s Financial Sector
Roberto Lazzeri Montaño has been appointed as the new director general of Nafin and Bancomext, effective August 18. Previously, he served as the head of the Coordination Office within the Secretariat of Hacienda and Credit Public from July 2023. Lazzeri Montaño’s career in the public sector began in 2005 when he managed the local public debt portfolio at the Secretariat of Finance in the District Federal Government (now Mexico City).
He also worked as a Structuring Finance Manager at Banobras in 2009, specializing in subnational debt structuring and financing.
