Mexico Continues to Block Trafigura Fuel Imports Despite Regaining Permits
(Reuters) — Trafigura has been prevented from bringing fuel to Mexico months after the lifting of import restrictions on the global commodities trader, federal court documents showed, underscoring the roadblocks that foreign energy companies continue to face.
The Geneva-based company in April convinced a federal court judge in Mexico City to lift the suspensions, according to documents from the second district court for administrative matters seen this month by Reuters, and in May the court formally ratified the decision.
Trafigura had those permits suspended last year after another commodities trader admitted to bribing officials in Mexico, Brazil and Ecuador. The suspension froze five Trafigura import permits covering hundreds of millions of liters of gasoline, diesel, and jet fuel imports over 20 years.
The action came amid Mexican President Andres Lopez Obrador efforts to roll back the previous government's oil industry reforms and grant more market power to state-run energy companies.
Amid the suspension, Lopez Obrador last year separately accused Trafigura of being involved in fuel smuggling in the country. Trafigura denied the accusation and no charges were brought.
The court's release should have returned Trafigura's access to the world's fourth largest gasoline import market. Mexico spent $15 billion on fuel purchases last year and has paid $14 billion so far this year amid higher prices, according to official data.
New Hurdles
Mexico's energy and tax authorities, however, have remained opposed to allowing Trafigura to import fuel.
The state tax authority (SAT) removed Trafigura from a list of firms authorized to import oil products. Its decision, which came three days before the judge ratified his reinstatement of its import permits in May, raised a new hurdle.
Trafigura owes Mexico about $10.6 million in pending taxes and excluding the company from its importer list was unrelated to the disputed permits, SAT told the court, according to the documents viewed by Reuters.
The federal judge had ordered Mexico's energy ministry in May to notify the tax authority that Trafigura did not have to be excluded from the list of approved importers, one of the court documents showed.
Mexico's energy ministry, which has not publicly explained the reason for Trafigura's original permit withdrawal, argued in court the company ignored specific authorizations and improperly moved its products by vessels instead of a pipeline from a Veracruz maritime terminal, as instructed by authorities.
Trafigura replied in court that it did not disobey the terms and the use of specific infrastructure was not mandatory, according to the documents.
The energy ministry and SAT did not reply to requests for comment on the dispute.
Economic Costs
Trafigura warned that the decisions had exposed it to unspecified economic damages due to an inability to access 11 tanks containing already imported oil products. The documents do not specify the type of products retained.
A company spokesperson told Reuters Trafigura "continues to comply with applicable laws and regulations in the jurisdictions where it operates, including Mexico." The company did not provide details about the status of imports.
Trafigura is also facing a civil trial in Brazil under bribery accusations. There has been no final decision reached in that case.
Since taking office in 2018, Lopez Obrador has shut the door to new oil and gas auctions, provided more cash to and encouraged new projects at state-owned Petroleos Mexicanos and utility CFE.
Mexico's energy regulator has canceled more than 300 permits for trading refined products, crude, condensate and natural gas to companies including Shell and Iberdrola.
Canada and the United States in July demanded talks within a regional trading treaty under accusations of discrimination in Mexico to companies from those nations, following years of complaints that could lead to costly commercial disputes.
Related News
Related News
- Keystone Oil Pipeline Resumes Operations After Temporary Shutdown
- Biden Administration Buys Oil for Emergency Reserve Above Target Price
- Freeport LNG Plant Runs Near Zero Consumption for Fifth Day
- Enbridge to Invest $500 Million in Pipeline Assets, Including Expansion of 850-Mile Gray Oak Pipeline
- Williams Delays Louisiana Pipeline Project Amid Dispute with Competitor Energy Transfer
- Evacuation Technologies to Reduce Methane Releases During Pigging
- Editor’s Notebook: Nord Stream’s $20 Billion Question
- Enbridge Receives Approval to Begin Service on Louisiana Venice Gas Pipeline Project
- Russian LNG Unfazed By U.S. Sanctions
- Biden Administration Buys Oil for Emergency Reserve Above Target Price
Comments