Uncertainty Looms Over AMLO’s Energy Self-Sufficiency Goal

As President Andrés Manuel López Obrador's term ends, his plan to achieve energy self-sufficiency in fuel production faces mounting uncertainty. López Obrador estimates a shortfall of 100Mb/d to 200Mb/d in fuel production, casting doubt on the fulfillment of his pledge to end fuel imports by the end of his tenure. This follows an announcement from earlier this month when the government projected a gasoline deficit of only 62Mb/d by September 2024.

Despite optimistic projections, PEMEX’s six operational refineries processed an average of 789.12Mb/d between January and November 2023. This falls short of the envisioned production levels, with only 250Mb/d of gasoline and 133Mb/d of diesel achieved. In contrast, PEMEX imported an average of 396Mb/d of gasoline and 170Mb/d of diesel during the same period, reports Forbes.

PEMEX CEO Octavio Romero asserts that the Dos Bocas refinery, with a 340Mb/d capacity, will be fully operational by the end of March. However, past production date announcements have not materialized, and coking plants in Tula and Salina Cruz are yet to contribute substantially. The plan is for Dos Bocas to produce 170Mb/d of gasoline and 120Mb/d of diesel when fully operational.

President López Obrador recommends continued investment in existing refineries and even suggests the possibility of constructing a new one. Expressing regret over missed opportunities to acquire plants in the United States, he sees building another refinery as a solution to eliminate future fuel imports.

In 2023, PEMEX processed an average of 794Mb/d, falling 8.4% below the goal presented before the Chamber of Deputies. Multiple factors contribute to PEMEX's challenges, including the mismatch between refinery designs and the shift toward heavy oil. Delayed construction of strategic plants, like cokers, further hinders efficient use of heavy crude oil.

PEMEX's historical challenges in construction and budgeting raise concerns about the Dos Bocas refinery's completion. Recent announcements claim commercial production of gasoline and diesel will reach their maximum capacity by the end of March, yet skepticism persists given PEMEX's track record.

The Baker Institute for Public Policy's 2024 Mexico Country Outlook sheds light on the complexities facing PEMEX and the broader energy sector. Critical questions emerge about the viability of achieving energy self-sufficiency, particularly with potential delays in the Dos Bocas refinery operations until 2025. As the administration grapples with these challenges, the energy sector's ability to meet its self-sufficiency goal remains a key concern for the nation's future.