Pemex abandons plans to increase crude oil refining: blow to government ambitions

The state-owned company Petróleos Mexicanos (Pemex) has abandoned its plans to increase crude oil refining, dealing a blow to the ambitions of the obradorista government, which will not be able to meet the established goal in this six-year term. After several unsuccessful attempts, the state-owned company acknowledges that it will not be able to quickly raise the amount of refined oil, which has direct implications on gasoline production in the country. During the month of May, Pemex's six refineries operated at their lowest level in months, processing 842,000 barrels per day, which also resulted in a significant reduction in gasoline production. With a production of only 267,000 barrels per day, the state-owned company only covers between 30% and 35% of the national gasoline demand, which is around 800,000 barrels per day, forcing the country to rely on imports to meet domestic consumption. In particular, the Cadereyta refinery in Nuevo León and the Minatitlán refinery in Veracruz reduced their fuel production by almost 50% during the month of May, reflecting the complexity and challenges that Pemex faces in its attempt to increase crude oil refining to optimal levels. Pemex's initial goal, established since 2019, was to achieve a daily refining of one million barrels, supported by a maintenance plan for its six refineries. However, this goal was only reached in March of this year, with a production of 1.062 million barrels per day, a figure that could not be sustained over time, highlighting the structural difficulties faced by the state-owned company. The delay in the start-up of the Olmeca refinery in Tabasco has been another determining factor that has prevented Pemex from achieving self-sufficiency in fuels. Even without a specific date for the start of its commercial operations, this facility has seen its construction budget doubled, adding additional pressure to the state-owned company's plans. In this context, the full operation of the Dos Bocas refinery, scheduled for July according to previous statements by Pemex's director, Octavio Romero Oropeza, has not materialized, leaving the responsibility to continue efforts to increase oil refining in the hands of the next federal administration. The president-elect, Claudia Sheinbaum, has reaffirmed the importance of state-owned companies in the government's plans, while the next Secretary of Energy, Luz Elena González Escobar, has mentioned that energy sovereignty will be a priority in efforts to increase oil refining, although she has not provided additional details on this matter. In conclusion, Pemex's decision to abandon its plans to increase crude oil refining highlights the challenges faced by the state-owned company and the government in achieving their energy objectives. With domestic demand surpassing the company's production capacity, the pursuit of self-sufficiency in fuels remains a pending goal that will require sustained efforts and effective strategies to achieve it.