The Fourth Transformation’s Energy Goals and Initial Actions
The Fourth Transformation (4T) pledged to restore energy sovereignty and took aim at foreign and private capital investments in hydrocarbons extraction and electricity generation since 2014. This endeavor, with both positive and negative outcomes, was marked by the war on fuel theft at the start of the López Obrador administration.
Key Investments and Their Consequences
The 4T’s second phase embarked on a direct confrontation against a distinct form of fuel theft –fraudulent importation of hydrocarbons– and aimed to achieve “energy justice” through reduced fuel prices. However, two significant legacies emerged from these early attempts:
- The acquisition of tanker trucks by the military to transport fuels while regaining control over the pipeline network.
- The establishment of Gas Bienestar and Gasolinas Bienestar, which have accumulated three years of operational losses.
The Impact on Energy Sector Stakeholders
Coinciding with the emergence of these Pemex subsidiaries, the Energy Regulatory Commission imposed a ceiling on the retail price of liquefied petroleum gas (LPG) to protect family budgets. Amidst inflation, logistical insecurity, and unfair competition from Gas Bienestar, energy sector entrepreneurs –who rely on margins for operation and reinvestment– have demanded the removal of this restriction.
Political Aspirations and Criticisms
The development of a new public policy for the energy sector could potentially catapult Luz Elena, the current Energy Secretary, onto the list of presidential aspirants for 2030. She is valued in hardline 4T circles, though she lacks legislative or campaign experience. Her powerful allies include Banxico, Pemex, the Education, Hacienda, and Economy secretariats.
However, she faces criticisms and accusations from opponents. Recently, there have been allegations about her intention to place one of her associates in the Judicial Discipline Tribunal. Critics have also launched a media campaign accusing her of replicating the Obradorist strategy, maintaining unsustainable subsidy policies, and potentially bestowing favors on the López Beltrán family.
The Influence on Gasoline and LPG Prices
Both gasoline retailers and LPG producers are among the economic groups affected by the 4T administration’s price control policy for fuels, implemented through Secretary González and Profeco head Iván Escalante, one of her most trusted operators.
Their rigid stances in negotiations have sparked a wave of criticism. Unlike the gasoline price adjustment, which required a “voluntary agreement” with distributors and only affected the Magna price, the LPG price cap was non-negotiable.
The PACIC’s effectiveness was evident, and federal authorities sought to control tortilla prices. Industry leaders argue that fuel costs account for only 3-5% of the final consumer price and questioned the rationale behind the measure, as it’s popular among low-income populations but represents “a punishment for the market and a barrier to investment.”
