Mexico imports 99% of Premium fuel to meet domestic demand

The increase in Premium gas prices is, partially, the result of Mexico producing less than 1% of the refined fuel barrels needed to meet domestic demand, which has forced the federal government to import the product from the United States .

According to information obtained from Mexico's Ministries of Finance, Energy, and Economy, and from state-owned oil company Petróleos Mexicanos (PEMEX), almost 9 out of 10 Premium gas liters (in its two versions: conventional Premium and Premium Ultra, UBA) used by the latest vehicle models comes from U.S. refineries.

Mexico sells crude oil to the U.S. at an average price of USD$ 62.45 per barrel (according to numbers of the first quarter 2018) and once it has been refined by our northern neighbour, it returns to our country at a price of USD$ 77.6 per barrel , in the case of Conventional Premium, and USD$ 80.4 for Premium UBA, pursuant to statistics of the Ministries of Finance and Economy.

This means that Mexico pays USD$ 15.15 and USD$ 17.95 more per barrel of national oil refined abroad, considering that at least nine of the major American refining companies process Mexican crude oil (*):

1. Chevron USA Inc.
2. ExxonMobil Oil Corp.
3. Houston Refining LP
4. Marathon Petroleum Co. LLC
5. Paulsboro Refining Co. LLC
6. Phillips 66 Co.
7. Shell Oil Co. Deer Park
8. Total Petrochemical and Refining USA
9. Valero Marketing and Supply Co.

* According to data (April 30th) from the U.S. Department of Energy.

The last official price reported by PEMEX in December 2016 (before gas prices were deregulated) was MXN$ 14.81 for Premium fuel and it rose to MXN$18.85 during the first quarter of 2018.

Gasoline deregulation underway in Mexico

Nevertheless, according to Mexico's Energy Regulatory Commission, some Mexican states have reported higher prices, such as Jalisco (MXN$ 19.81), Zacatecas (MXN$ 19.74), and Baja California (MXN$ 19.72).

According to the monthly operation reports of Pemex Transformación Industrial – branching PEMEX office in charge of producing Premium fuel – production levels began to fluctuate and in October 2018 the National Refining System – comprised of refining complexes Tula, Minatitlán, Salamanca, Cadereyta, Salina Cruz, and Madero – decreased its production to less than 1,000 barrels a day .

Currently, refineries Madero, Salamanca, and Minatitlán do not produce this fuel anymore.

During the first quarter of 2018, barely 1,156 barrels of Premium fuel were produced and sales in the country increased to 121,000 barrels – which means production barely covered 0.96% of the demand.

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