President Vincente Fox of Mexico has set out plans for major reforms of the county’s energy sector with the unveiling of a constitutional amendment allowing private companies a more direct role in the exploration and production of natural gas.

The plan is expected to allow private companies to develop natural gas reserves in the north-eastern states of Nuevo Leon, Tamaulipas and Coahuila, along with the Gulf coast states of Veracruz and Tabasco. Pemex would remain the owner of the gas.

Fox has also set out proposals that electricity tariff price rise limits for the majority of domestic consumers will not be allowed to increase by more than 4% in 2006, along with a proposed law to allow private companies to partner Pemex in managing the nation’s crumbling pipeline system.

However, constitutional changes in Mexico require a two-thirds vote in the Congress and approval by state legislatures, a measure that Fox will struggle to achieve.