PEMEX and CFE’s Spending Drops Off

In 1Q22, the investment of PEMEX and CFE shrank 16.7 percent compared to the same period last year, according to official figures. The negative trend can be explained by an 18.1 percent year-over-year decrease observed in the expenses that the state-owned companies spent on construction, maintenance of construction sites and the acquisition of goods.

According to the Ministry of Finance and Public Credit (SHCP), the two state-owned companies spent MX$81.851 billion (US$4.05 billion), less than in the same period of 2021, when MX$91.558 billion (US$4.53 billion) were expended.

In April 2022, PEMEX and CFE invested MX$25.870 billion (US$1.28 billion), an amount that by omitting the effect of inflation translates to a decline of 10.3 percent in contrast with the same month in 2021.

During the first four months of 2022, PEMEX’s expenses for construction and maintenance at construction sites and the acquisition of capital goods was MX$75.794 billion (US$3.75 billion), an inferior amount to the MX$85.146 billion (US$4.21 billion) that was spent in the same period the past year.

According to the Center for Public Finance Studies (CEFP) of the Chamber of Deputies, the NOC’s decrease in expenditure stands contrary to the government’s strategy by to support PEMEX financially, so that this investment can contribute to the development of Mexico.

In 2021, the federal government doubled its efforts to complete priority projects in the oil and gas industry. President López Obrador has made patrimonial contributions to PEMEX for the construction of the Dos Bocas refinery in Tabasco, the acquisition of the Deer Park refinery in Texas and the rehabilitation of six other refineries to increase downstream production. During the past week, works at the Minatitlán refinery were finished.

The inauguration of the Dos Bocas refinery is programmed for July 2, 2022. The Ministry of Energy requested additional funds at the end of April, but no response to the request has been made public.

CFE expended MX$6.57 billion (US$325.24 million) during the first four months of 2022, an amount 4.2 percent higher than the MX$5.412 billion (US$267.92 million) utilized in the same period the past year. In April 2022 alone, the company spent MX$1.749 billion (US$86.58 million) on construction, site conservation and acquisition of capital goods. This amount represented a fall of 29.8 percent by comparing it to the same month in 2021, however.

For 2022, CFE looks forward to diverse investments in infrastructure, like the interconnection of the Holbox Island in Quintana Roo, the replacement of the submarine power line at Isla Mujeres and the modernization of distribution substations.