UPDATE 1-Mexico to impose fuel standards on new cars

Tue Aug 4, 2009 2:49am IST

(Adds quote, background on Mexican auto sector, byline)

By Robert Campbell

MEXICO CITY Aug 3 (Reuters) - Mexico will introduce fuel efficiency standards for all new cars as part of its effort to help curb the emission of greenhouse gases, the head of the National Ecology Institute said on Monday.

The government is currently studying which type of standards to impose but it is leaning towards a plan that would be similar to proposed fuel efficiency rules in California or other parts of the United States, Adrian Fernandez said in an interview.

"The standard will cut gasoline imports by as much as a new refinery," Fernandez said. The ecology institute Fernandez heads is one of the principal environmental policymaking bodies in the Mexican government.

Mexico is one of the world's largest car builders and most global auto companies have at least one factory in the country. The auto industry is a critical part of Mexico's manufacturing sector, which has been hard hit by the recession in the United States.

Car production over the first half of the year fell 42.9 percent as both export and domestic sales plunged.

Mexico relies on imports to cover more than 40 percent of gasoline demand due to a lack of domestic refining capacity and experts have warned the country's dependence on imports could surge unless new plants are built.

Officials have spoken of the need to keep building new refineries as the number of vehicles on Mexican roads is expected to rise to by more than 14 million by 2017.

State oil monopoly Pemex plans to spend nearly $10 billion on a new refinery near Mexico City to help reduce dependence on imports. (Reporting by Robert Campbell; Editing by Marguerita Choy)

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