The Mexican business environment for energy sector players could be hampered by plans to fold autonomous regulators and the competition watchdog into existing ministries.

AMLO

Mexican President Andres Manuel Lopez Obrador said last week he was considering the move in a bid to save money to prioritize social spending as the economy reels from the impact of the coronavirus.

Analysts at political risk consultancy Eurasia Group said the moves would “further hit business confidence.” The move does not come as a surprise, however, with regulator budgets already slashed in the president’s push for austerity.

“Lopez Obrador has always disliked these institutions, thinking they are too expensive and do not serve the purpose they were created for,” Eurasia analysts said.

The...