An economic evaluation of Mexico's resolve to maintain the Pemex monopoly in natural gas.

摘要

For political and historic reasons, it seems very unlikely that Mexico will dismantle Pemex's monopoly over natural gas production. Interestingly, there maybe potential future benefits associated with Pemex's domination of the Mexican gas industry. The size of Mexico's gas reserves make it plausible that Pemex may ultimately capture extra surplus from foreign consumers through the exertion of market power. While the NAFTA does not preclude such a scenario, there may be other more effective ways of advancing Mexico's national interest.;It can be argued that Mexico's prerogative to choose from a selection of industry regimes is effectively a trade policy choice. We provide a basis for modeling Pemex as a dominant firm, develop theoretical models based on the different "regimes" Mexico may choose and compare the corresponding welfare effects. Using a mathematical program to account for the nodal structure of the industry, we apply monetary values to these effects.