Mexico’s president-elect López Obrador will seek to lower gas prices in three years

Last Monday

, after meeting with the leaders of Mexico’s industrial sector, president-elect, leftist Andrés Manuel López Obrador , stated that there would be no more increases (beyond the inflation rate) in fuel, energy, and gas prices during the first three years of his administration, after which prices would begin to come down, once domestic fuel output starts to rise thanks to refinery improvements and a planned new refinery.

“After three years, by which time we will have fuel production in Mexico - because we’re going to rehabilitate the six refineries and build one so we can stop buying fuel abroad - we will have lowered prices,” he said at a press conference.

In company of Francisco Cervantes , chairman of the Mexican Chamber of Industry (CONCAMIN) , who he deemed a socially responsible businessman, he talked about his energy plan in detail, stating that he would seek to reactivate all six existing oil refineries in the country and build two more in the next three years so that the country could establish a self-sufficient fuel production.

As for electric power, he claimed that the existing plants of the Federal Electricity Commission (CFE) would not be shut down, and that hydro-electrical plants would be used to their full capacity in order to generate clean and affordable energy.

López Obrador has long criticized a broad energy sector overhaul pushed through Congress by current President Enrique Peña Nieto , but has toned down attacks in recent months. Peña Nieto’s popularity suffered a big hit after a sharp fuel price rise in January 2017 .

During the campaign, López Obrador said he would lower fuel prices as soon as he reached power, but later said he would not undertake any “real price” rises. He has also said he wants to build two new refineries but might settle for just one.

Mexico’s six refineries, which are owned by state-oil firm Pemex , are operating at 43 percent capacity , while crude production has fallen to 1.9 million barrels per day , well below the 3.4 million bpd reached in 2004 . The president-elect aims to rescue the energy sector from what has clearly become a critical situation: “Energy production is dropping. Unless we implement an emergengy plan, there could be an even bigger crisis, so this is one of our top priorities,” he stated.

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Mexico also imports 65 percent of its gasoline needs and 60 percent of the diesel consumed in the country .

López Obrador said on Monday that “there won’t be any above-inflation rises in gas, diesel and electric power prices.”

He added that “the aim” of his administration is to reach a 4 percent growth , for which he will decentralize federal agencies. He mentioned that a program could also be implemented for the creation of an industrial corridor at the Isthmus of Tehuantepec region , where he will lower value-added and income taxes .

The industrial leaders agreed to cooperate with the next administration in the implementation of these programs and, in turn, asked the president-elect to address the issue of insecurity and violence which has deeply affected their operations in the last few years.

“The transport and railway industries, as well as several representatives from private companies, have stressed that security is their main concern. They have personally asked us to address the issue of insecurity and violence in the country,” stated López Obrador.

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