How much do Mexicans pay for regulation in the transportation of oil products?

The new oil derivatives transportation scheme proposed by the 2013 Mexican Energy Reform allowed new participants to enter the sector. The new legal framework requires fulfilling many requirements and corresponding duties for the transportation of oil products. The Mexican government already has an institution dedicated to measuring the regulatory cost of each federal procedure. This work aims to quantify the regulatory costs associated with the procedures and their compliance to obtain permits for transporting oil products by truck. We use the standard cost method to measure these costs, considering all associated costs. The results showed that two government offices did not adequately measure these costs. They did not consider relevant information on frequency and opportunity costs, resulting in undervaluation and leading to wrong expectations. As a result of this research, we provide a more accurate way of estimating these costs, which brings greater certainty in the budgeting of these projects and, therefore, increases the probability of survival and success. © Copyright (c) 2024 Alan Israel Jiménez-Pérez, Francisco Ortiz-Arango

1. Introduction -- 2. Regulation and procedures -- 2.1. Permits granted by CRE after the energy reform -- 2.2. The energy reform regulation sets requirements -- 3. Evaluation of the cost of regulation -- 3.1. Methods of evaluation -- 3.2. Standard cost method -- 3.3. The standard cost method used by Conamer -- 3.4. Mandatory evaluation of the costs and benefits of regulation in Mexico -- 3.5. Critics on the conamer and the ministry of energy evaluations -- 3.6. A comprehensive evaluation -- 4. Results -- 5. Discussion.