PEMEX Finances Strain Federal Budget Despite Midyear Cuts

Mexico’s public finances remain unsustainable despite fiscal cuts made in 1H25, with PEMEX playing a central role in the shortfall, according to recent government data. According to México Evalúa, federal oil revenues totaled MX$442.9 billion by June 2025, a 22.2% decline from the same period in 2024. Of this, PEMEX contributed MX$128.1 billion to the federal government, but the NOC received MX$95 billion in transfers, leaving the government with a net gain of only MX$33.1 billion. This figure represents just 7.5% of the oil revenues obtained by the broader public sector.

Oil revenue performance also fell short of projections. The expected amount by June was MX$652.2 billion, but the government only collected MX$442.9 billion, 32.1% below expectations. The shortfall was driven by a drop in PEMEX’s production and the reinstatement of tax obligations that had been deferred in 2024. While the federal government collected 27% (MX$23.3 billion) more in taxes from PEMEX, the company’s own income dropped 34.6% (MX$140.2 billion).

Overall, Mexico’s total public sector revenue stood at MX$4.1 trillion, which was 3.4% (MX$134 billion) higher in real terms than the same period in 2024. However, this amount was still 2.3% (MX$94.7 billion) below the government’s projection of MX$4.199 trillion.

Although federal tax revenues surpassed forecasts by 3.7% (MX$113.9 billion), when excluding transfers to PEMEX, the increase was only 0.6% (MX$19 billion). Currently, MX$69 of every MX$100 of public sector revenue is derived from taxes, while MX$11 comes from oil.

The combined expenditure of PEMEX and CFE reached MX$512.7 billion in 1H25, the lowest level recorded since 2011. PEMEX’s spending dropped by 23.8% (MX$82.5 billion), while CFE’s grew 5.7% (MX$13.4 billion). In terms of investment, PEMEX absorbed MX$36 of every MX$100, followed by housing with MX$34. Education, health, and national security received significantly lower allocations at MX$3, MX$2, and MX$2 of every MX$100, respectively.