Introduction to Pemex and its Financial Challenges
Petróleos Mexicanos (Pemex), one of the world’s most indebted oil companies, has utilized more than half of its approved budget for the year within just five months. This information, provided by Mexico’s Secretaría de Hacienda y Crédito Público (SHCP) under Edgar Amador Zamora, reveals that between January and May of this year, Pemex received 91.3 billion pesos via the Secretaría de Energía (Sener).
Budget Line Usage and Debt Amortization
The heavy usage of the budget line is primarily due to debt amortization payments, according to César Rivera, an investigator at the Centro de Investigación Económica y Presupuestaria (CIEP). As of the end of the first quarter, Pemex’s debt amounted to over 2 trillion pesos. The company has been making amortization payments in an attempt to reduce its debt, with these payments being part of its financial strategy for the year.
Decrease in Income and Increased Spending
According to the SHCP report, both Pemex’s income and expenditures have experienced double-digit annual declines. In the first five months of the year, Pemex’s expenditure totaled 234.285 billion pesos, marking a 22.1% annual decrease.
- Expenditure Breakdown:
- Most expenditure categories experienced a decline, except for “other expenses,” which saw a 16% annual increase.
- Income Decline:
- Pemex’s income amounted to 265.332 billion pesos, reflecting a 34.6% annual decrease.
Impact on Public Finances and Pemex’s Future
These financial developments have resulted in the public treasury receiving fewer oil-related revenues, as highlighted by México Evalúa. The organization pointed out that Pemex contributed 109.9 billion pesos to the federal government, but the government returned 91.32 billion pesos through transfers. Consequently, the state only gained 18.6 billion pesos, which is a mere 4.9% of the oil revenue.
Addressing Pemex’s Financial Challenges
Edgar Amador Zamora, head of the Secretaría de Hacienda, acknowledged that the budget line is a temporary solution for Pemex’s complicated financial situation. He emphasized the importance of generating resources in the short or medium term to meet its obligations.
Key Questions and Answers
- What is the main reason for Pemex’s heavy reliance on its budget line? The primary reason is to cover debt amortization payments, which are part of Pemex’s financial strategy to reduce its substantial debt.
- How has Pemex’s income and expenditure performed in the first five months of 2023? Both income and expenditure have experienced double-digit annual declines. Expenditures decreased by 22.1%, while income dropped by 34.6%.
- What impact has this had on public finances? The public treasury has received fewer oil-related revenues due to these financial developments in Pemex, resulting in a lower net gain for the state.
