PEMEX Cuts Fuel Supply to Service Stations

The downstream sector is facing uncertainty due to unexplained supply issues coming from PEMEX, causing difficulties that have even led to the closure of some service stations across the country.

The problem has been observed since March 2022 but has worsened during the past few days in the north of the country, especially in Nuevo Leon. The Mexican Association of Service Station Providers (AMPES) informed that currently around 100 stations are closed throughout the country due to a lack of product to sell, though the issue is not as visible everywhere.

“Gas stations have been struggling with the fuel supply for around two months on a national level, which has been more intense in some regions. Today, the issue was in Monterrey but one month ago it was mainly in Tijuana. We can also see the problem in Chiapas, Sonora, Sinaloa, Baja California and Nuevo Leon, among many other areas,” said Alicia Zazueta Payán, Vice President, AMPES.

The root of the problem is that PEMEX is supplying less fuel to stations. If an owner wants to fill their storage tanks and asks for 60,000l, the NOC will only provide 20,000l, no matter if the service station’s owners have the financial capacities to pay for the supply in full.

A shortage due to a high demand for PEMEX products appears to be behind the issue, more so than the logistical problems that are also part of the conundrum. The NOC has the most competitive prices in the market thanks to the government’s fiscal incentives on diesel and gasoline, as well as the limitation of private companies to import these products from the US.

If the main problem was logistics, the NOC would not be rationalizing gasoline, say experts. Currently, PEMEX terminals are asking service stations to report their stock, and if they have enough to operate for two days, PEMEX does not send more product.

Private industry participants have voiced their frustration that PEMEX has not released any information regarding the issue, while businessmen saw meeting requests declined by the NOC. Without a strategy to attend to the national demand, AMPES foresees an increase in service station closures as tensions are on the rise.

A lack of storage infrastructure, the return to normal economic activity following the COVID-19 pandemic and the increase in export demand arising from the boycott against Russia have all been cited as reasons for the logistical bottleneck currently hampering PEMEX’s fuel distribution in several regions of the country.