Mexico: Cofece imposes fines of more than 2.4 billion pesos on LP gas distributors for manipulating prices and dividing up the market to the detriment of consumers

Statement from the Federal Economic Competition Commission

This is an automated translation of the original press release issued in Spanish

The Plenary Session of the Federal Economic Competition Commission (Cofece or Commission) fined 53 companies and 34 people who acted on their behalf for a total of 2,414 million 51,954 pesos, for colluding to fix, raise, arrange and manipulate the distribution price of liquefied petroleum gas (LP gas) through plants and sale at service stations, as well as dividing, distributing, assigning or imposing portions of the market, through customers in the national territory, in terms of article 53, sections I and III of the Federal Economic Competition Law (Law or LFCE).

LP gas is the most widely used fuel for domestic use in the country and, according to the National Survey on Energy Consumption in Private Homes of the National Institute of Statistics and Geography , eight out of ten families use it as their main fuel for food cooking. From January to June 2022 alone, the value of total LP gas sales at the national level amounted to more than 36 billion pesos, according to data from the Energy Information System of the Ministry of Energy.

Once the procedure followed in the form of a trial was concluded, the Plenary Session of Cofece determined that there were sufficient elements to prove the absolute monopolistic practices carried out by the accused distributors - who are part of the Soni, Nieto, Tomza, Simsa, Global, Uribe and Metropolitano—in Mexico City and some municipalities of the State of Mexico, Culiacán, Colima and Tamaulipas. ¹

Through these conducts, the economic agents agreed to maintain their market shares and avoid competing with each other, which resulted in a deterioration in the supply conditions of this important energy source, as well as the charging of undue price premiums.

As a result, the Plenary of Cofece determined that, from 2007 to 2019, the offenders caused an estimated damage amounting to 13 thousand 392 million 548 thousand 798 pesos. Considering the magnitude of the damage, the intentional nature of the behaviors and the relevance of the affected market in the general welfare, the behaviors were classified as highly serious and the indicated fines were imposed.

The Plenary also considered it appropriate to impose the sanction of disqualification on various natural persons who participated in some of the accredited agreements during the validity of the LFCE.

Economic agents have the right to challenge this resolution ² through an indirect amparo trial before the Judicial Power of the Federation.