Mexican state-run oil firm Pemex is waiting to see how oil prices behave in the mid-term before altering its strategy on crude exports, Finance Minister Edgar Amador told Reuters on Friday.
“Our perspective is that this should be a relatively temporary effect,” Amador said in an interview at Mexico’s annual banking convention, referring to the recent climb in prices tied to the war in the Middle East.
Pemex (PEMX.UL) has sought to prioritize refining over exports in recent years in a government-backed bid to reduce Mexico’s longstanding reliance on imports, and in recent months dramatically reduced its crude oil exports.
Analysts say it may make more sense for Pemex to export crude and import refined oil, which costs less than domestically refining the oil.
Pemex could reconsider its strategy if the Middle East conflict persists much longer, Amador said. ”You also have local refineries to feed,” he said. “You have to strike a balance between them,” adding that he expects Mexico to experience a relatively neutral fiscal effect from the rising oil prices.
During the second week of March, Mexico’s crude exports to the U.S. reached 640,000 barrels per day, a 160% increase compared to the last week of February, before the start of the U.S.-Israeli war with Iran.
Amador also said Pemex is taking “baby steps” to become financially independent, but noted that the goal could take longer to reach than officials’ previous estimate of 2027.
Pemex has received billions of dollars in government support for several years to alleviate its liabilities. It received 395 billion pesos ($21.99 billion) in government aid last year.
“Our projection is that by 2027 (at) the earliest, maybe a little bit later, that they’ll be able to stand on their own,” Amador said.
He projected there would be government spending reductions next year, although not to social programs, which he said are constitutionally protected. Amador said “rainy-day” funds are currently running at 150 billion pesos.
He also addressed growing concerns in the private sector about Mexico’s tax agency, which has become embroiled in disputes with domestic and international companies, including South Korea’s Samsung Electronics (005930.KS), opens new tab, over tax obligations.
Amador said he was aware of the issue and seeking to move forward with a “rule-based approach” for dealing with large firms’ tax obligations.
