English

Price controls in Mexico: IFT and Cofece

Price controls in Mexico involve, among others, the Federal Economic Competition Commission (Cofece), the Federal Telecommunications Institute (IFT), the Ministry of Economy (SE) and the Ministry of Finance and Public Credit (SHCP).

First of all, the Political Constitution of the United Mexican States and the Federal Law of Economic Competition (LFCE) allow the imposition of maximum prices for goods and services considered “necessary” for the economy and popular consumption, in case of shortages and price increases.

However, according to the authorities, prices are only regulated if Cofece or the IFT determine that there are no conditions of effective competition.

Otherwise, even if there is a shortage, prices will not be regulated.

While the SE is responsible for determining the maximum price, based on criteria to avoid supply shortages, the Federal Consumer Protection Agency (Profeco) will monitor the implementation. Mexican authorities indicated to the World Trade Organization (WTO) that this type of price control has not been implemented.

Also, if Cofece determines that there are barriers to access to “essential” inputs or that there is no effective competition in a relevant market, it may recommend to the sector regulator to adopt regulatory measures, such as price or tariff controls.

Price controls

In 2020, Cofece recommended that tariffs for rail transportation of chemicals and petrochemicals be regulated.

In the telecommunications and broadcasting sector, if the IFT determines that there is a lack of competition in the market for essential inputs it adopts the relevant measures.

The maximum sale price of medicines and supplies is regulated by the SE, except for those produced by public pharmaceutical companies, which are regulated by the SHCP.

Medicines

In setting prices, the opinion of the Ministry of Health (SSA) is taken into account.

The maximum sales price is determined based on the international reference price and the costs of distribution and marketing in Mexico.

The price of patented drugs is regulated; however, the price of over-the-counter drugs (for which no prescription is required) is not controlled.

Electricity rates, except for generation, are regulated by the Energy Regulatory Commission (CRE).

In the case of basic supply tariffs, these are set by distribution area, type of demand and voltage level.

The retail prices of gasoline, diesel and liquefied petroleum gas (LPG), as well as the wholesale (“first-hand”) price of natural gas were liberalized in 2017.

However, on July 29, 2021, as an emergency and transitory measure, the maximum retail price for LPG was reintroduced.

 

Redacción Opportimes

Publicidad
Mostrar más
Botón volver arriba