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Mexico president wins key party vote on reform of national oil company

March 04, 2013|By Tracy Wilkinson

MEXICO CITY -- In an important test of President Enrique Peña Nieto’s sway over resistant factions of his party, the ruling Institutional Revolutionary Party has changed its bylaws to clear the way for major reform of the gigantic national oil company.

Meeting in its annual convention, the PRI, as the party is known, on Sunday passed several changes that Peña Nieto needed to make possible a series of reforms he has promised as the hallmark of his administration.

Chief and most difficult among them is a plan to open the behemoth state oil company, Petroleos de Mexico, or Pemex, to private and foreign investment, long a taboo in this country.

Pemex, a symbol of nationalistic pride, is the top income earner for the Mexican state, but its production of oil has been declining dramatically and the company is in dire need of outside expertise for deep-sea exploration and other projects.

Peña Nieto has stated that reform of Pemex is a top priority, but his party’s bylaws forbid its members who serve in Congress from voting on any change in the way the company is managed.

On Sunday, after hearing from the president, several thousand members of the party voted unanimously to change the rules and allow support for Pemex reform.

The membership also voted to allow its representatives to support changes in the value-added tax scheme. PRI statutes had prohibited taxes on food and medicines, but Sunday’s vote removed that ban.

Sunday’s vote was a significant gauge of whether Peña Nieto would be able to win the support of the more recalcitrant members of the party who remain wedded to old-style PRI nationalistic paternalism and who are not inclined to change the way Pemex is run nor the way taxes are levied.

“Let’s show, with attitude, with action and with voice, that we are a new generation of PRI,” Peña Nieto told the convention. “This is an assembly of renewal and transformation.”

His plans for Pemex have led the political left to accuse the government of attempting to privatize the oil company. The government insists that overall ownership of the oil business will remain in state hands; the reforms are expected to be presented to Congress late this year.

The PRI governed Mexico for seven decades until being ousted in 2000. With its return three months ago, the PRI government is seeking to reassert its authority over many aspects of Mexican political life while trying to convince observers that it is a more modern, less authoritarian party.

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