With the liberalization of Mexico's oil and gas market, OXXO fuel station chain, owned by Mexican multinational firm Fomento Economico Mexicano (FEMSA), where billionaire Eva Gonda Rivera and her daughters hold a large stake, is planning to consolidate its strong presence in Mexico's newly privatized fuel retail market.
"Our aim is to increase the number of OXXO Gas stations that carry our brand to 1,000 by 2020-2021," Rolando Vazquez, OXXO Gas director told me in an interview.
OXXO Gas, which is an affiliate of OXXO, Mexico's largest convenience stores chain, currently operates 2,500 gas stations in 16 Mexican states, but all but 336 are branded as Pemex, the acronym for the state-owned Petroleos Mexicanos.
Before Mexico's historic 2014 energy reform, which opened oil and gas exploration and production to domestic and foreign private capital for the first time in nearly eighty years, Pemex was the only company in Mexico's fuel retail market.
Leveraging its huge presence in Mexico’s retail sector where FEMSA (NYSE: FMX), Latin America's biggest independent Coca-Cola bottler and distributor, owns 15,000 OXXO convenience stores, the company rapidly set foot in the newly liberalized retail fuel market.
The process of rebranding began a year ago when Monterrey-based company inaugurated its first fuel station in July of 2016 under its own brand name in that Mexican Northern City.
"When we reached our goal of 1,000 service stations, we will have 10% of the market," said Vazquez. Mexico currently has 11,800 gas stations. Eventually OXXO Gas plans to rebrand all 2,500 with its own name.
Vazquez said that 90% of OXXO's convenience stores have gas stations that OXXO Gas operates although the vast majority still carry the Pemex brand name even though customers can tell they are operated and managed by OXXO. In fact, Pemex does not participate much in providing services at gas stations, it's role is to supply the gasoline.
"For the time being Pemex provides us with all the fuel but Pemex only produces 50%, the rest is imported from the U.S.," Vazquez said. This could also change. The new energy reform allows private companies, such as OXXO Gas, to have other providers other than Pemex.
"In the future the idea is that other companies such as ourselves and other large retailers can also import directly from the U.S. Importing our own gasoline is an option that we are assessing," said Vazquez.
Aside from OXXO Gas, other service station operators that have their own brands are Mexican companies PetroSeven, La Gas, and British Petroleum, witch owns three stations with the brand BP.
Vazquez explained it's hard to estimate the amount they will invest in the rebranding expansion because it will depend on whether the stations will be built from scratch, they already exist or they will be rented. "Rebranding all 2,500 stations we operate at OXXO stores is clearly a major job that we are carrying out gradually," Vazquez said
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