PEMEX fined with 22 million dollars for non-compliance

Mexico

’s competition authority said on Tuesday that it had fined a unit of state-owned oil company PEMEX (PEMX.UL) for presenting an annual compliance report on antimonopoly measures in the recently opened fuel market a year after it was due.

The Federal Commission for Economic Competition, or COFECE , fined PEMEX’s Industrial Transformation Unit , responsible for a range of refining and logistical activities, 418.31 million pesos ($22.1 million) for the late report.

COFECE said the report, one of the measures the PEMEX unit committed to in 2016 to end an investigation into monopolistic practices in the sale and distribution of diesel and other fuels was presented a year late.

“By delaying the presentation of the aforementioned audit, PEMEX’s TRI (Industrial Transformation Unit) disregarded a necessary and fundamental element for COFECE to verify compliance with the obligations acquired,” the authority said in a statement.

PEMEX will challenge the decision, contending that it has complied with all reporting requirements, and describing the fine as “illegal and disproportional,” the company said in a statement later on Tuesday.

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Last year, COFECE fined PEMEX’s Industrial Transformation unit nearly 369 million pesos for the “possible commission of a monopolistic practice... in the diesel market.”

At the time, PEMEX said it would challenge the fine.

In 2015 , COFECE informed that PEMEX TRI was possibly commiting monopolistic practices, given its differential treatment regarding first hand sales to marine diesel distributers.

Before the investigative authority issued a responsability verdict on September 2016 , the oil company made a commitment to implement six measures to enable market competition and free trade.

One of the responsibilities they assumed was the annual presentation of a report made by an external auditor on the benefits of the first hand sale and trade of LP gas, gasoline, diesel, jet fuel, and heavy fuel.

The reports were meant to be delivered for a five year period during the first three months of each year; however, only the first one was delivered a year late.

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dm