PEMEX Loses Ground to Private Gas Stations

Close to 11 percent of PEMEX’s franchised gas stations in Mexico were rebranded to become part of private fuel retail conglomerates during 1Q21, reports Forbes, meaning PEMEX lost 879 gas stations to private companies. The country still has 7,205 gas stations with PEMEX’s brand, of which 7,160 are administered by private companies and 45 are operated by PEMEX’s Industrial Transformation division and serve the NOC’s internal demand. Although PEMEX still supplies to 80 percent of the country’s gas stations, its market share in terms of brand presence has been reduced by 40 percent since the Energy Reform was passed. 

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OPEC Forecasts Mexican Production Under 2MMb/d

OPEC projects demand to rise globally by 5.95 million barrels per day this year, a nearly 7 percent increase from 2020. As for Mexican production, OPEC said it expects output to average 1.94 million barrels per day in the 2H2021. This change in output demand comes at a time when Mexico’s President intends to keep production under 2 million barrels a day to cover internal fuel market demand.

Refinery Plant in Hidalgo Will Be Completed

President Ándres Manuel López Obrador announced that the government had decided to finish the construction of the refinery in Tula, Hidalgo, which was abandoned by previous governments. López Obrador reiterated that he is eliminating corruption from PEMEX and, as a result, the government is reviewing previous contracts. "Now these plants are being acquired, the contracts are being reviewed and we have not finished because previous governments did a lot of damage,” said the President.

PEMEX Pays Lowest Taxes in Decades

SHCP has issued its official report on Mexico’s public finances for 1Q2021, revealing that PEMEX is now operating under a historically low tax rate. The NOC paid US$2.65 billion in taxes, which represents 17 percent of its income. Both of these numbers are considered the lowest levels in the last two decades. This rate resulted from an 11-percentage-points reduction of the original tax burden of 28 percent through a federal government decree issued earlier this year. From 2012, when the NOC paid taxes equivalent to 60 percent of its income, PEMEX’s tax burden has decreased every single year.

PEMEX Support Burdens SENER

The SHCP document also demonstrates that SENER spent US$3.16 billion during this quarter, a 213 percent increase when compared to last year. This main reason for this increase was that SENER paid for additional support packages for PEMEX, which were ordered back in February, to the tune of US$1.58 billion. The only government department that saw a higher increase in spending was SEDATU, which increased by 417 percent. SENER’s budget also went above the limit of what had been originally approved, given the fact that these PEMEX payments were suddenly announced and executed in the middle of February.