AMLO administration fights in court to suspend clean diesel rule issued to Pemex

Mexico’s state-run oil company Pemex has been fighting for almost a year in court to suspend a rule issued by the previous government, requiring the nationwide sale of clean diesel to start this year, court documents seen by Reuters show.

Mexico does not produce enough ultra-low sulfur diesel (ULSD) to satisfy the demand the new rule – which was issued by the nation’s energy regulator in 2016 – would create, so U.S. refiners started gearing up last year to supply the neighboring country with more clean fuel.

But a district court granted Pemex legal protection in January by suspending enforcement of the rule across most of the country. The suspension limited the mandatory sale of ULSD to about 9% of Mexico, including the major population centers of Mexico City, Guadalajara, and Monterrey as well as the northern border region.

The court documents, reviewed by Reuters, show for the first time that Pemex is fighting in Mexican courts to indefinitely suspend the rule.

Sticking with high-sulfur fuel would save Mexico money by limiting fuel imports and extending a time-frame for truck makers to install ULSD-compatible engines. However, it risks adding to the perception that President Andres Manuel Lopez Obrador’s government is backsliding on environmental commitments.

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CDMX

Pemex argued in the documents that a lack of infrastructure to handle ULSD – which must have a maximum of just 15 parts per million of sulfur – could force Pemex to halt some operations at its domestic refineries.

Source: reuters

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