A judge knocks down electricity nationalization in Mexico


Mexico City

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The delay in the electricity reform sought by the Mexican Government has its own name: Juan Pablo Gómez Fierro, specialized in Economic Competition, Telecommunications and the judge in charge of delaying the implementation of the so-called nationalization of electricity. The dressings to the new Electricity Industry Law (LIE) were paralyzed the day after it came into force and they sought to give priority to the Federal Electricity Commission (CFE) over any other company in the sector. The judgment can be challenged by an ordinary court and it is, more than likely, that the reforms and additions to the Electricity Industry Law continue their course.

The ruling establishes that the rejection of an individual’s investment would grant a competitive advantage over other industry players and cause distortions in the market, affecting competition and the development of the sector, “which is precisely one of the adverse effects that this precautionary measure seeks to avoid. The reform is aware that hydroelectric plants cannot supply enough electricity, so they resorted to the state electricity company that uses oil and coal as assets with higher cost and pollution to the detriment of renewable energies.

The three provisional suspensions ruled by the court have not been without controversy since the President of the Government himself, Andrés Manuel López Obrador asked from Las Mañaneras, the public box from which he addresses the Mexican people daily, to analyze the judge’s performance. As the newspaper El Universal indicates, it could incur interference with the Judicial Power, affecting the division of the three powers. The head of the Executive branch asserted that Gómez Fierro “Acted as a subordinate of the companies”. As a prelude, López Obrador wanted to confirm that there is no threat to the New York City Bar Association, which ruled it as an attack for which the political leader named the defenders as “traitors to the country” for representing foreign companies «Who want to continue looting Mexico», in his own words. Shortly after, he highlighted the immoral role of companies in countries where they are protected and used the Iberdrola case as an example.

Due to the dissolution of Luz y Fuerza carried out in 2011 by Felipe Calderón and the consequent energy reform by Enrique Peña Nieto, three years later, the electricity industry is considered a service provided by companies both national and foreign. In a pandemic year and after numerous power outages in February it seems that it will return, for the most part, into public hands.

Gasoline rises 10%

The transformation into electrical energy is joined, despite the voluntary confinement, the rise, since the end of last year, in gasoline (10%) and liquefied gas (17%), which are used by nine out of ten households. López Obrador has resorted to “the speculation of the gasoline businessmen with fuel” as a reason for the price increase, in the meantime, protests and looting such as the 2017 gasoline bomb are ruled out. , they would not rise more than inflation. Even with the incentives provided by the Ministry of Finance and Public Credit to avoid the speculative increase, it has finally been demanded due to the increase in the price of a barrel and the rise in the dollar.

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