David Madero, former president of the National Center for Natural Gas Control (Cenagas), told El Economista that the price of natural gas to end users will inevitably increase in Mexico if this body complies with the request of the Ministry of Energy to provide the service of transportation capacity of the National Natural Gas Transportation System (Sistrangas) only to those who prove that they bought the molecule from Petróleos Mexicanos (Pemex) or the Federal Electricity Commission (CFE).
In May, the price of this gas, of which Mexico imports 70% of national consumption, reached 8.14 dollars per thousand British thermal units (BTUs), which increased 2.7 times in one year, in contrast with the price of 2.91 dollars per thousand BTU of May 2021 in the Henry Hub market where the marketers of the country in the south of the United States are listed. The increases were transferred in equal measure to national consumers, explained the expert.
And this happened despite the fact that today there is competition between about 14 marketers for users in the country. The largest private players in the market are Shell and BP, which have their own oil fields and storage centers and therefore can compete with better prices to import gas into Mexico.
“The marketers will have to respect their sales agreements with Mexican clients, but to bring them the gas, they will buy it from the CFE, which in turn does not produce gas, so it will buy it from the upstream subsidiaries of these same marketers, distorting and raising prices by how much? We cannot calculate it, but it will certainly happen,” said David Madero.
Although both Pemex and the CFE have qualified personnel for trading activities in multiple markets, such as crude oil and energy, they do not have experience as “traders” in a market such as natural gas, which is so liquid, local, that it moves so fast and in recent months has been so volatile, so these inefficiencies “I say this with respect to my colleagues from Pemex and the CFE” will also be reflected in price increases, said the former president of Cenagas after the 2014 reform. “We are going to live in a resale market, that is the reality,” said David Madero.