Mexico’s President to Present Key Energy Reform This Month

Sep 1, 2021

(Bloomberg) Mexico’s President Andres Manuel Lopez Obrador said in his third state-of-the-union address, the halfway point in a six-year term, that he plans to present a bill revamping the energy sector to congress this month.

The proposal of a constitutional amendment giving priority to the state utility company, the Federal Electricity Commission, over private competitors has been discussed by the leader for months, but he used his speech Wednesday to put a timeline on it. The amendment must be approved by congress, where it is expected to face an uphill battle: although the legislature is still stacked with members of the president’s own party, that support was watered down by the mid-term elections in June.

President Lopez Obrador Holds Press Briefing — Andres Manuel Lopez Obrador, Mexico’s president, listens during a news conference in Mexico City, Mexico, on Monday, April 19, 2021. Mexico’s president will propose a regional agreement on migration to the U.S. this week and the expansion of his tree planting program to Central America as an option to provide order in the process of seeking entry to the U.S.

In his speech, AMLO, as the president is known, pointed to his achievements thus far in revamping the energy sector, including changes to the electricity commission and a bolstering of the state-owned oil company, Petroleos Mexicanos, which he said should soon be able to fulfill domestic demand.

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“We are getting rid of vices and dishonest practices in the management of government,” he said, adding that his administration stopped handing out concessions to private companies for mines, water, hospitals, ports, trains, beaches, prisons, and public works. “But the most important part is that we have stopped privatization in the energy sector, for petroleum and electricity,” he said.

The reform of the electricity market is one of three proposals he has repeatedly mentioned as key for the latter part of his term, which started in December 2018. The other two include reforming the complex electoral system of proportional representation and bringing the National Guard, which his administration created, under the control of the Defense Ministry.

Senate majority leader Ricardo Monreal, who belongs to Lopez Obrador’s party, Morena, said in June that passing all of these amendments would be complicated in a divided congress. Morena lost ground in the lower house, where its coalition lost their two-thirds majority needed to amend the constitution, and in the key district of Mexico City in the June vote, even though the party obtained a majority of the state governorships up for grabs.