PEMEX Reports Lower Income on Fuel Sales

PEMEX reported lower profit from fuels in November, despite higher demand and sales. The NOC produced 312.9Mb/d, 26.3 percent more than October and the highest production of the year.

Although PEMEX sold a total of 671.8Mb/d, 24Mb/d more than the previous month, the company reported an 11.2 percent profit decrease. In October PEMEX made MX$53.04 billion (US$2.73 billion) from fuel sales, while the following month this figure dropped to MX$47.07 billion (US$2.42 billion).

Magna gasoline sales reached 551Mb/d, amounting to MX$37.97 billion (US$1.95 billion), MX$5.54 billion (US$248 million) less than the previous month. Premium gasoline sales reached 120.8Mb/d, representing  MX$9.10 billion (US$467 million), about MX$1.01 billion (US$51 million) less than October. Diesel sales reached 282.3Mb/d, retrieving MX$26.47 billion (US$1.36 billion), MX$2 billion (US$102 million) less than the previous month. Fuel oil sales and revenue decreased accordingly.

Magna and Premium gasoline reached MX$47.71 billion (US$2.45 billion) in sales, while it is a 14.3 percent increase in comparison to November 2021, it was one of the lowest levels of 2022. The company also achieved a significant increase in fuel production. PEMEX produced 272.4Mb/d in 2022, 18 percent more than in 2021.

According to experts, the decrease in income corresponds to a lower demand for oil and gas. Despite some volatility in the market, oil prices have continued to decrease over the last weeks of the year. Amid expectations of lower demand for oil due to China’s COVID-19 lockdown measures and the slowdown of the global economy, prices have stayed lower than the rest of the year.

Tax subsidies on fuels have also been cut gradually. The government has relied on tax subsidies to hold back inflation, with Mexico’s IEPS tax collection amounting to a loss of MX$88.59 billion (US$4.51 billion) in 2022. This week adds the fourth consecutive week without subsidy for Premium gasoline. However Magna gasoline subsidy increased to 24.49 percent and for Diesel, it increased to 77.56 percent.

The current administration stands firm on its refining-oriented energy strategy. As part of its energy self-sufficiency goals, PEMEX bought half of Shell’s Deer Park refinery and the investment has already been recovered. The NOC currently sends 25 percent of the Deer Park refinery’s products to Mexico and expects to be able to send 100 percent of Deer Park’s production to Mexico by 1H24, contributing to energy sovereignty.