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News Article

PEMEX Produces Less Gasoline of Less Quality, But at Best Price?

By Pedro Alcalá | Wed, 08/04/2021 - 09:46

PEMEX is reporting decreasing levels of gasoline production and its quality in certain regions of the country is not up to normative standards, while private fuel retailers struggle with import permitting procedures. It remains unclear why the NOC is not taking advantage of a possible opportunity to increase its market share.

According to PEMEX’s own reports, at 189,000b/d, gasoline production at PEMEX’s refineries fell by 12.04 percent during June 2021 when compared with June 2020, a startling revelation considering the aggressive decrease of fuel consumption caused by the pandemic that the market experienced at this time last year. These levels for June 2021 also represented a decrease of 12.41 percent when compared to May 2021, when they reached 216,000b/d. In fact, these levels represent the lowest since October 2020, when production reached 181,000b/d (however, this report from Oil & Gas Magazine also claims that in November 2020, gasoline production went as low as 167,000b/d). 

PEMEX justified these decreases by saying that they were caused by a fall in heavier crudes being processed at the refineries in Madero and Minatitlan. SENER also reported to El Financiero that PEMEX’s fuel sales had decreased 11 percent during the first four months of 2021 when compared to the same period in 2020. 

There is nothing unusual about gasoline production and sales levels fluctuating, especially as the NOC continues to rehabilitate and do maintenance on its six refineries, as well as combatting fuel theft. However, other fuel retailers and commercializers are currently suffering the delays and other operational consequences of imports and permitting restrictions imposed by the government. 

In an interview with El Economista, Carlos Vallejo Galván, legal director of the Association of Regulated Entities of the Energy Sector (Asociación de Regulados del Sector Energético or ARSE), said this was a clear signal of the government’s intentions of spending the rest of this administration eliminating PEMEX’s competition wherever it can. However, in order for PEMEX to take advantage of this and use its competitors’ problems as an opportunity to increase its share and control of the market, it would need to be increasing its productivity right now to make the timing coincide. 

The lack of productivity also has to be coupled with a lack of quality; an exclusive investigation by El Universal revealed that the fuel being supplied and sold to the Guadalajara metropolitan area (Mexico’s second largest) does not comply with normative quality standards. A market study by Merca 2.0 also published this month revealed that PEMEX´s fuel products are not highly rated by the average consumer. The other question that would remain is whether PEMEX retains an advantage in terms of price. The answer to that has been recently given by PROFECO, since they claim that the lowest prices on the market have consistently been found in the last month to be coming from service stations operated by PEMEX in the states of Chiapas and Veracruz.

The data used in this article was sourced from:  
Oil & Gas Magazine, El Financiero, El Economista, El Universal, Merca 2.0
Photo by:   PEMEX
Pedro Alcalá Pedro Alcalá Journalist and Industry Analyst