Pemex to raise profit margins for service stations

Friday, February 10, 2006

Mexico's state oil company Pemex will raise profit margins for fuel sales at franchise service stations as it implements a program to replace fuel pumps with certified equipment to avoid fuel theft, Pemex said in a statement.

Pemex will increase sales profit margins for franchisees to 6.5% from 5.92% of total Pemex Magna and Pemex Premium sales, and raise profit margins for diesel sales to 6.5% from 4.36%, the statement said.

The increase is an incentive established in the new franchising contract for fuel service stations presented to franchisees last week.

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Pemex's fuel pumps replacement program seeks to fight the illegal fuel market and fraud as the new equipment will allow the company to monitor and control via satellite the volume and quality of fuel inventories at franchise service stations, the statement said.

Pemex says the new contract for service stations will benefit franchisees and consumers despite reports that some franchisees plan to protest against the new contract, which they say gives Pemex too much control over their operations.

Pemex also denied press reports about a project to cancel fuel service station franchises to start direct fuel sales through a new service station network.

The new contract will replace the current franchise legal framework, which has been operating since 1992 and limits Pemex's ability to control the volume and quality of fuel distribution, the statement said.