How much does Mexico really pay for regulation in oil products transportation?

Abstract

AbstractThe new oil derivatives transportation scheme proposed by the 2013 Mexican Energy Reform allowed new participants to enter the sector. The new legal framework requires fulfilling many requirements and corresponding duties for the transportation of oil products. Currently, the Mexican government already has an institution dedicated to measuring each federal procedure's regulatory cost. This work aims to quantify the regulatory costs associated with the procedures and their compliance to obtain permits for the transportation of oil products by truck. We use the standard cost method to measure these costs considering all associated costs. The results showed that two government offices did not adequately measure these costs. They do not consider relevant information on frequency and opportunity costs, resulting in undervaluation and leading to wrong expectations. As a result of this research, we provide a more accurate way of estimating these costs, which brings greater certainty in the budgeting of these projects and, therefore, increases the probability of survival and success. JEL classification: H83, K23, O13.