Walmart Mexico announces plans to open gas stations

Wal Mart de Mexico (WALMEX.MX), Mexico’s biggest retailer, said on Thursday that it will open gas stations alongside its domestic stores, joining other private companies that are now competing with Pemex, the country’s former monopoly fuel seller.

Retail and convenience store chains are especially well positioned to tap into Mexico’s retail gasoline market, given their existing networks of stores where motorists can buy snacks and sodas while filling up their tanks.

Wal-Mart de Mexico, known as Walmex, said its “first phase” includes six sites in the states of Tabasco, Nuevo Leon, Veracruz and Mexico, installed in shopping centers or parking lots of its Walmart, Sam’s Club and Bodega Aurrera stores.

Private companies began jumping into Mexico’s retail fuel market after a 2013-14 energy sector overhaul ended state-owned oil company Pemex’s monopoly, which ranged from crude oil production to retail fuel sales and lasted for decades.

Mexico, the second-biggest economy in Latin America, is one of the world’s biggest gasoline consumers and the top foreign importer of U.S. gasoline. The country boasts some 11,400 gas stations, the vast majority of which remain Pemex franchises and continue to buy Pemex wholesale fuel.

Foreign oil companies including Spain’s Repsol (REP.MC), France’s Total (TOTF.PA) and Anglo-Dutch oil major Royal Dutch Shell (RDSa.AS) operate hundreds of gas stations, while Mexican retailer Femsa (FMSAUBD.MX) runs 500 under its Oxxo convenience store brand.

Walmex, with 2,395 stores across Mexico, did not say how many fueling stations it ultimately plans to open, or over what time period. Its U.S. parent company, Walmart (WMT.N), has long partnered with fuel retailer Murphy USA (MUSA.K) on gas stations near its stores, which participate in a Walmart discount program.

Walmex fuel sales are intended to complement the company’s existing businesses by offering gas at competitive prices and enticing motorists into stores, spokeswoman Gabriela Buenrostro said.

“In a single stop, they will be able to come to our stores and clubs to buy the merchandise they want as well as refuel gas in a safe and trustworthy way,” she said in a statement.

Other new players in the retail fuel market, such as Britain’s BP (BP.L), have emphasized customer service to compete against Pemex, whose gas stations have long been criticized and sanctioned for not selling complete liters of fuel.