Mexico on Tuesday increased to 10% the optional proportion of ethanol in gasoline for most of the country except the major metro areas of Mexico City, Guadalajara and Monterrey.
The new standard, known as NOM-16, was announced two weeks ago by the country's Energy Regulatory Commission (CRE) and put in place after it was published in the official gazette Monday.
By raising the ethanol component from the previous 5.8%, the government is adopting the same standard as the US Environmental Protection Agency as a way to ease gasoline imports from north of the border. The move also seeks to strengthen competitive conditions for imports, the CRE said.
Though higher, the ethanol blend remains optional and not mandated, as in the US. Ethanol will now compete with other oxygenates, primarily MTBE, on an economic basis for share in gasoline.
Without the largest cities allowed to blend the biofuel, demand is sharply curtailed. There have also been concerns around the import infrastructure for ethanol, as very few if any terminals in Mexico have tank space available for ethanol.
As EPA values on anhydrous ethanol on regular and premium types of gasoline are now part of Mexico's regulations, CRE has set volume proportions of 32% aromatics and 12.5% olefins, and mass rates of 2.7% and 3.7% in oxygen, respectively, for premium and regular gasolines. For Mexico City, Guadalajara and Monterrey, the oxygen composition is set at 1% minimum and 2.7% maximum for both premium and regular gasoline.
The CRE resolution ratified the government's schedule for liberalization of the gasoline market in all five market regions in the country, aiming to complete the process before the end of 2017.
Liberalization has already entered into effect in the states of Baja California and Sonora (March 30); and Chihuahua, Coahuila, Nuevo Leon, Tamaulipas and the Gomez Palacio Municipality in Durango (June 15).
Later this year the deregulation is expected to reach Baja California Sur and Durango y Sinaloa (October 30); and Aguascalientes, Mexico City, Colima, Chiapas, Mexico state, Guanajuato, Guerrero, Hidalgo, Jalisco, Michoacan, Morelos, Nayarit, Puebla, Queretaro, San Luis Potosi, Oaxaca, Tabasco, Tlaxcala, Veracruz and Zacatecas (November 30).
The last states to join the new market framework will be Campeche, Quintana Roo and Yucatan (December 30).
