Executive Summary:
- On February 20, 2023, the CRE published in the DOF two agreements declaring the expiration of a total of 128 permits related to the commercialization of petroleum products, petrochemicals and liquefied petroleum gas.
- The expiration of permits does not release permit holders from compliance with their obligations and responsibilities under the permit during its validity.
- The affected permit holders may challenge the resolution declaring the expiration in order to ensure that their permits remain valid.
On February 20, 2023, the Energy Regulatory Commission (“CRE”) published in the Official Gazette of the Federation (“DOF”) the following two agreements declaring the expiration of a total of 128 permits: 60 permits for the marketing of petroleum products and petrochemicals in accordance with Article 55, Section I, subsection b) of the Hydrocarbons Law (“LH”); and 68 permits for various activities related to liquefied petroleum gas in accordance with Article 55, Section I, subsection b) of the Hydrocarbons Law.
The Hydrocarbons Law establishes that permits may expire (i) if the permit holders do not exercise the rights conferred within the established period or in the corresponding permit or, (ii) in the absence of an established period, if the permit holders do not exercise the rights for a consecutive period of 365 days.
In both cases, the expiration of permits is the consequence that the LH imposes on the permit holders of the regulated activities due to inactivity in the exercise of the rights conferred on them by the permit titles. For this to be valid, the following assumptions must be met:
- The existence of a right that enables a person to carry out any of the activities regulated by the LH through the respective permit.
- That the holders of the permits have failed to exercise the rights conferred upon them for three hundred and sixty-five consecutive calendar days.
- The Commission's review and verification of inactivity in the electronic files associated with permit holders, in order to provide certainty about the passage of time that led to their configuration.
Given the above, the Agreement provides that, in accordance with the acts of supervision and monitoring carried out by the Commission, it was determined that the rights conferred in the permit title were not exercised for a consecutive period of at least three hundred and sixty-five calendar days, so that the Permit Holders identified in said Agreements are inactive and did not carry out any acts tending to preserve their rights, a situation that lasted for a consecutive period of more than 365 calendar days. In addition, a large part of the permit holders did not exercise their right to a hearing.
The affected permit holders may challenge the agreements to defend their rights and seek to keep their permits in force, since the expiration can only be challenged through an indirect amparo trial, in accordance with Article 27 of the Law of the Coordinated Regulatory Bodies in Energy Matters.
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