Mexico Fuel Retailers Brace for Mounting Cost Pressures, Profitability Risk in 2027
Mexican fuel retailers are describing what could be the most challenging year in 2027 as they are facing mounting pressure on its business profitability toward that year as capped retail prices converge with regulatory, financial, traceability and labor regulations, industry representatives said last week during a webinar organized by Mexico City-based outlet EnergyNews.
Smaller retailers are particularly vulnerable because they lack the scale to spread operating costs across multiple locations, said Jose Luis Ballesteros, president of the Oaxaca Fuel Retailers Association. Nearly all service stations selling 200,000 liters/month or less face significant pressure on their margins, he said.
The roughly 9,000 service stations that source fuel from state-owned oil company Pemex theoretically have a margin of 2.32 pesos/liter under a 24 pesos/liter cap established by the government for regular gasoline, based on a rack price that has remained almost unchanged at 21.68 pesos/liter, Ballesteros said.
However, retailers must deduct freight costs ranging from 8 centavos to 1 peso/liter, depending on the distributor, along with expenses associated with regulatory compliance including volumetric controls, system maintenance, cybersecurity, inspections, laboratory testing, leak-tightness tests and vapor recovery systems required by the National Energy Commission (CNE), environmental regulator ASEA and other authorities.
“Many stations whose owners have just one or two locations at most have no way to cover that,” Ballesteros said.
Labor costs are adding to the pressure, including higher employer contributions to retirement funds, an increase in statutory annual vacation, and minimum-wage increases over the past three years. The government is also pursuing a gradual reduction in the workweek from 48 to 40 hours between 2027 and 2030.
“That leaves us with only one adjustment variable. And that variable is the margin. There is nothing else,” Ballesteros said.
With retail gasoline and diesel prices effectively constrained by government agreements, retailers can no longer rely on raising prices to offset higher expenses, said Roberto Díaz de León, general director of fuel retailer Combured.
Fuel station performance was traditionally measured by sales volumes and market share, but tighter margins are prompting operators to seek additional revenue streams, he said.
“We need service stations that can invest, modernize and remain viable over time with sufficient profitability,” he said.
Enrique Félix Robelo, president of Mexico’s largest fuel retailers association, Onexpo, said retail prices should increase next year at least in line with inflation, which would require adjustments to the current voluntary fuel price agreement.
The government has also increased the fees and other regulatory payments while regular gasoline prices have remained “virtually” unchanged over the past two years.
Diesel retailers face even tighter margins under the current agreed price of 27 pesos/liter, Félix Robelo said, as much of the fuel is sold on credit or through fuel vouchers, which carry transaction fees of 70-90 centavos.
An agreement suspending fees paid by service stations for accepting electronic payments, announced for May through October, is also due to expire at the end of the month.
Onexpo hopes the agreement will be renewed for another period as the government is expected to begin a gradual transition away from cash payments at fuel stations in 2027 under a recently approved digital-payments law.
“We fully support the Digital Economy Law, but what we need to review is how it will be implemented. The rules and how the system will operate need to be examined very carefully,” Félix Robelo said.
Beyond operating costs, retailers could face increased regulatory scrutiny as the government steps up efforts to combat fuel smuggling and tax evasion.
Santiago Arroyo, an energy regulation adviser at Mexico City-based firm Ursus Energy, said fuel retailers were the most heavily penalized in 2026, amid a widespread perception that they were responsible for selling smuggled fuel, “which is not the case.”
Recent government statements have also called for limiting the role of fuel marketers, which is another segment in the fuel supply chain viewed as vulnerable to fuel smuggling. This could lead to greater tax scrutiny of the sector, Arroyo said.
“Eliminating one link in the chain will not eliminate costs. Someone will have to take on financing, logistics, credit risks and commercial services,” he said.
Reporting by José Luis Adriano, jadriano@opisnet.com; Editing by Karla Omaña, komana@opisnet.com and Michael Kelly, mkelly@opisnet.com