Mexico’s Diesel Demand May Shift From Retail Stations to Self-Consumption Sites: Analysts

Mexico’s push to regularize fuel self-consumption facilities could gradually shift diesel demand away from public fuel stations as large transport fleets and industrial users weigh the operational, financial and tax benefits of dispensing their own fuel, industry analysts told OPIS.

Luis Guzmán, founder of Mexico City-based regulatory consultancy Especialistas en Transición Energética, said he expects the shift to accelerate next year as the government seeks to regularize thousands of facilities used to fuel company vehicles.

Fuel wallets have failed to deliver the expected tax-deductibility benefits for companies that currently refuel their vehicles at gas stations. Credit arrangements are unpopular with both buyers and sellers, while issuing corporate bank cards to drivers carries financial and operational risks, according to Guzmán.

“When self-consumption really starts to take off, we will no longer see much diesel at fuel stations, and we will no longer see fleets at fuel stations,” Guzmán said.

The shift is likely to vary by company size. Guzmán expects large fleets to increasingly dispense their own diesel for operational, financial and tax reasons, while smaller operators may continue relying on public stations.

He said the practice of filling trailers with 800 liters of diesel and trucks with 140 liters will increasingly give way to smaller purchases of around 1,000 pesos (about $54), equivalent to roughly 37-40 liters, among companies with limited vehicle fleets.

Carlos Vallejo, founding partner at Mexico City-based QUA Energy, said smaller self-consumption facilities may decide against seeking regulatory approval if the costs outweigh the benefits.

Facilities handling less than 10,000 liters per month are the least likely to seek regulatory approval if the cost-benefit analysis does not justify it. Instead, he said, these companies are likely to prefer supplying their fleets through fuel retailers.

“Many facilities have already run the numbers and said, ‘It doesn’t make economic sense for me, so I’m not going to apply for the permit,'” he said.

Mexico’s energy regulator, the National Energy Commission, or CNE, launched a preliminary registration program in August to facilitate the regularization of self-consumption facilities. By mid-October, the program had registered nearly 1,500 facilities, according to OPIS reviews.

Freight transportation, agriculture and passenger road transportation companies account for nearly 70% of registrations to date. Cement maker Cemex, freight carrier Castores and passenger bus operator Autobuses Estrella Blanca have the largest numbers of registered facilities, underscoring the range of industries seeking regulatory approval for their fuel installations.

The registration will close on Dec. 31, and starting 2027 all facilities must have a valid CNE permit to operate.

Industry analyst Ramses Pech said that many fuel stations would need to modify their infrastructure to serve industrial fleets. Ensuring a return on those investments would require long-term supply contracts with companies, which he considers difficult to secure amid current market uncertainty.

In a document analyzing the regulatory framework, Pech said the transition from self-consumption as an operational practice to a CNE-regulated activity will require companies to maintain tighter controls over each facility, with its own registration number and file. Fuel must be sourced from authorized distributors and marketers, and consumption must be auditable through operating logs, volumetric controls and evidence that the fuel is used for the company’s own needs.

Guzmán expects fuel retailers to face pressure to diversify their business models and offer additional services, including bill payments for electricity, water and internet, while improving customer service.

Several fuel station groups have also been exploring the installation of electric vehicle charging stations, Guzmán said. For now, private-sector interest largely reflects a strategy of securing valuable locations for future use rather than seeking immediate returns from electricity sales.

The potential loss of high-volume diesel sales to self-consumption facilities could add to the incentive for retailers to diversify, particularly if large commercial fleets increasingly fuel their vehicles on-site.

At a convention in Guadalajara earlier this year organized by the Mexican Association of Service Station Suppliers, or Ampes, industry leaders identified an opportunity for fuel retailers to recover market share lost to the proliferation of unregulated self-consumption facilities. That opportunity could expand if noncompliant sites are forced to close or invest in the infrastructure needed to meet regulatory technical standards.

Reporting by José Luis Adriano, jadriano@opisnet.com; Editing by Karla Omaña, komana@opisnet.com and Michael Kelly, mkelly@opisnet.com