OREANDA-NEWS. BP will open some 1,500 fuel retail stations in Mexico over the next five years as part of the country's ongoing fuel market liberalization.

BP may also invest in fuel infrastructure, such as storage terminals and products pipelines, as part of a plan to invest "hundreds of millions of dollars" in the country's fuel markets, BP's Mexico downstream general manager Alvaro Granada said today.

The first BP station opened today in Ciudad Satelite, Estado de Mexico, a state that borders Mexico City.

BP will sell two types of gasoline, regular and premium, with diesel to follow in a few months. For now, BP buys the fuel from Pemex, then mixes in its own additives in a Pemex terminal near Mexico City that the company has invested in.

"We have been working with Pemex for the past seven months to be able to enter the market as quickly as possible," said Paul Auge, BP's vice president of business development in Latin America.

Mexico's fuel market opening and the arrival of new companies is the result of a ground-breaking energy reform enacted in 2014 that revoked Pemex's downstream and upstream monopolies. Starting in January 2016 companies were allowed to open non-Pemex branded stations. Fuel imports were allowed starting in April, although very few have begun imports.

There are about 11,400 gas stations in Mexico, the majority of them still Pemex-branded. Today, Mexico counts eight non-Pemex fuel retailing brands, including Gulf Mexico, the local affiliate of Indian conglomerate Hinduja; OXXO Gas, a division of local beverage retailer Femsa; and domestic brands Hidrosina and Combured.

BP is one of 22 firms that have pre-qualified to participate in Pemex's first-ever open season for fuel storage and transportation in the northwestern border states of Sonora and Baja California. Interested bidders have until tomorrow, 10 March, to submit their proposals with capacity awarded on 15 March.

While Pemex is the sole owner of products pipelines in the country, other companies have already shared their interest in freeing up fuel storage in upcoming open seasons. Mexican state power utility CFE will unveil its open season 14 March, offering up to 2.5mn bl of storage.

The open seasons in the two states will be followed by price liberalization - where prices will no longer be set by the finance ministry - scheduled to take place on 30 March. On 25 May other regions along the US border will introduce market-driven prices, followed by the rest of the country throughout the year, ending in the Yucatan Peninsula in November 2017.