Update: Mexican Motor Oil Import Ban
As previously reported, Mexican president Lopez Obrador issued a decree earlier this week temporarily banning imports of over 60 fuels, chemicals and certain petroleum products into the country. The decree says that fuels are being imported without proper documentation, that some fuels are being imported under different tariff categories to avoid paying taxes, and that fuels are being adulterated and pose a threat of harm to consumers. The illegal fuels market in Mexico is significant.
Finished lubricating oils (with and without additives) and greases are among the 68 tariff classifications covered by the decree’s import ban. Five ILMA members have confirmed that lubricants are affected by the decree, informing the Association that their trucks, and in one instance, rail cars, have been blocked this week from entering Mexico.
Here are actions that ILMA is taking to address the issue:
- The Association immediately contacted the office of the U.S. Trade Representative (USTR). The USTR is responsible, in part, for developing and coordinating U.S. trade and commodity policies and is the president’s principal trade negotiator. ILMA spoke at length with the assistant U.S. trade representative responsible for small business. USTR was caught off guard by the timing of the release of President Lopez Obrador’s decree and has begun to engage with the Mexican government.
- ILMA is drafting a letter to the USTR detailing the effects of the Mexican decree on Association members. ILMA will recommend that the lubricating oil tariff classifications be removed from the decree and will point out, for example, that engine oils are not intended to be used as or in fuels, in part because of their high flashpoints and economic value. Additionally, because of limited base oil production in Mexico, ILMA will highlight the likely damage to vehicle engines in Mexico from lack of proper engine oils.
- The decree provides for an import permitting process administered by the Mexican Ministry of Energy. ILMA has initiated consultations with staff in the economic office at the U.S. embassy in Mexico City, where an individual handles U.S.-Mexico trade matters in the oil and gas industry. ILMA expects to receive guidance on how ILMA members can navigate and expedite the permitting process, especially if the import ban remains in place for some time.
- ILMA is coordinating with members in contacting their congressional offices, encouraging members of Congress to express their concerns to the White House and USTR.
ILMA will continue to assist members and keep them apprised of developments.