PEMEX Fuel Market on Path to Recovery
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PEMEX Fuel Market on Path to Recovery

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Fri, 02/11/2022 - 13:50

Amid consistent claims from US lawmakers to Mexico´s government for blocking US fuel retail companies, PEMEX closed 2021 with promising figures and is ready to take over the fuel market.

Associations like the American Petroleum Institute (API) among others report that American investors now face more difficulties to obtain permits for a variety of activities, including liquids and liquid gas stations, fuel imports and storage facilities for third parties.

In addition, these policy initiatives and prevailing legislative talks regarding the Electric Reform concern the US government. Between October 2020 and January 2021, the US government received approximately 20 letters of complaint regarding policies being discussed in Congress that strengthen public energy enterprises like PEMEX and the Federal Electricity Commission (CFE). These claim that actions taken by the Mexican government are contrary to the commitments agreed by Mexico and therefore violate USMCA clauses of investment protection, equipment exports and US energy resources.  

Fuel and Diesel Production

By December 2021 the NOC contributed with 618m b/d to the national supply of 814m b/d of fuel, defined as the sum of national production and imports, minus exports. Through National production and imports are equivalent to 83.5 percent of participation, its major level since August of 2020 with 84.3 percent. In addition, it contributed with 239m b/d to a national offer of 319m b/d of diesel, a 75 percent share, its largest percentage since May 2020 (76.9 percent).

In the case of diesel as in the case of gasoline PEMEX has recovered from a market loss.  The recovery in the fuel market is due to an increase of imports from 311m b/d to 425m b/d between August and December of last year, representing a leap in participation for the national supply from 42.9 percent to 52.2 percent.

For diesel the increment of national production was more notable, it went from 96m b/d to 137m b/d from April to December 2021, constituting an input to national supply from 29.4 percent to 42.9 percent.  

The NOC is incrementing its production to comply with the national supply and is planning on upgrading logistical services as well.

Logistics Plan

PEMEX’s strategy looks to grow from 5,600 to 7,600 daily tank trips which will enable the NOC to deliver fuel to 9,000 gas stations by the end of the year, said Octavio Romero Oropeza, PEMEX’s CEO. Around 1,800 tanks will be restored and routes between stations are expected to increase from 2 to 58. The acquisition of the tanks is part of PEMEX’s strategy to enhance logistics and supply chains of its products. Already the first 30 tanks of the new vehicle fleet have been authorized by Romero Oropeza to start operating. PEMEX pretends to be more efficient and to cut operation spending since it will stop renting services such as transportation.

Romero Oropeza did not fail to mention that the units have cutting edge technology and comply with all environmental regulations in addition to be equipped with a double compartment that enable the transportation of two types of refined oils simultaneously, proving more security and protection.

Photo by:   Wikimedia Commons

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