Background on Pemex and Its Current Situation
Petróleos Mexicanos (Pemex), Mexico’s state-owned petroleum company, has seen a significant reduction in its investment in infrastructure. According to data released by Mexico’s Secretaría de Hacienda y Crédito Público (SHCP), Pemex’s investment in physical infrastructure between January and July 2025 decreased by 32.1% compared to the same period in 2024.
Who is Pemex and Why is it Relevant?
Pemex is Mexico’s national petroleum company, responsible for exploring, producing, refining, and marketing oil and natural gas. It is a crucial entity for Mexico’s energy sector, accounting for the majority of the country’s oil production and refining capacity. Given its importance, Pemex’s financial health directly impacts Mexico’s economy and energy security.
Key Investment Figures and Their Implications
In the first seven months of 2025, Pemex invested a total of 149,172 million pesos in infrastructure, which is the lowest amount since 2008. Of this total expenditure, 51% went towards infrastructure investments. Moreover, the company’s overall programmable spending dropped by 29.2% compared to the same period in 2024.
México Evalúa, an independent evaluation organization, highlighted that Pemex’s investment reduction of 18.9% annually, as approved by the Mexican Congress for this year, has already resulted in a much steeper decline. This raises concerns about Pemex’s goal to achieve financial self-sufficiency by 2027.
Government Support and Debt Obligations
According to Pemex’s Strategic Plan 2025-2035, the Mexican government will continue to support Pemex through debt obligation transfers until the following year. The plan aims for Pemex to become financially self-sufficient by 2027, capable of paying its debt and maintaining investments.
Operational Impact and Financial Strain
The reduced investment has already affected Pemex’s operations. In the first months of 2025, Pemex produced an average of 1.44 million barrels of crude daily, which is 7.69% below the set target of 1.56 million barrels for the period. This represents the lowest extraction rate in over 35 years.
Simultaneously, Pemex’s financial burden from its debt has increased. Between January and July 2025, the company paid 104,300 million pesos in interest, a 30% rise compared to the previous year.
Government Transfers and Their Effect on Pemex’s Finances
The federal government has transferred 110,800 million pesos to Pemex through the Secretaría de Energía (Sener) between January and July 2025. These transfers constitute 81% of the 136,000 million pesos budget line approved for Pemex this year.
However, México Evalúa points out that these transfers to Pemex also mean the government receives fewer petroleum revenues, negatively affecting public finances.
For instance, Pemex contributed 146,400 million pesos to the federal government by July 2025. Yet, after accounting for the 110,800 million pesos in transfers, the government only gained 35,600 million pesos.
Future Government Support and Its Implications
For the upcoming year, the government has proposed a budget line of 263,500 million pesos for Pemex, an 86% increase compared to the amount approved for 2025.
Impact on Fiscal Consolidation
Following the presentation of the Paquete Económico 2026, Mexico’s Secretaría de Hacienda acknowledged that the support for Pemex complicates fiscal consolidation efforts. Consequently, the deficit as a percentage of the Gross Domestic Product (GDP) is expected to remain at 4.3%, instead of the initially targeted 3.9%.
One of the key factors contributing to this slower fiscal convergence is Pemex’s support, which places significant pressure on the budget for both 2025 and 2026. The accumulation of debt over the past decade, particularly during neoliberal governments, has led to a 130% increase in Pemex’s debt from 43,000 to 105,000 million dollars.
Debt Vulnerability and Future Challenges
Approximately 46% of Pemex’s debt obligations fall within the current administration, necessitating continued financial support through the approved budget line. This context suggests that the Requerimientos Financieros del Sector Público (RFSP) are projected to decrease to 4.1% of the GDP in the following year.
