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Regulation of gas marketing activities in México

Author

Listed:
  • Dagoberto L. Brito

    (Rice University)

  • Juan Rosellón

    (Centro de Investigación y Docencia Económicas)

Abstract

We study the implications of linking the Mexican natural gas price to the Houston price on the efficient marketing of gas in Mexico. We argue that Pemex should be permitted to enter into spot contracts or future contracts to sell gas. However, the price of gas should always be the net back price based on the Houston Ship Channel at the time of delivery. Pemex should not be permitted to discount the price of gas from the Houston netback price even in a non discriminatory fashion. This arrangement is transparent, it is easy to enforce and does not eliminate any legitimate market options for any of the parties involved. Pemex or consumers of gas can use the Houston market for hedging speculative transactions.

Suggested Citation

  • Dagoberto L. Brito & Juan Rosellón, 2003. "Regulation of gas marketing activities in México," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 18(1), pages 15-35.
    • Handle: RePEc:emx:esteco:v:18:y:2003:i:1:p:15-35
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/189/191
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    References listed on IDEAS

    as
    1. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, December.
    2. Ramirez, Jose Carlos & Rosellon, Juan, 2002. "Pricing natural gas distribution in Mexico," Energy Economics, Elsevier, vol. 24(3), pages 231-248, May.
    3. Vogelsang, Ingo, 2001. "Price Regulation for Independent Transmission Companies," Journal of Regulatory Economics, Springer, vol. 20(2), pages 141-165, September.
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