Introduction
Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company, has fallen short of its production targets in the first quarter of 2023. This shortfall has negatively impacted the Mexican government’s ability to increase tax revenue through fiscalization, according to the non-governmental organization México Evalúa.
Tax Income vs. Oil Revenue
While overall tax income saw a significant increase in the first quarter, with 1.5 trillion pesos collected—a 17.8% annual growth surpassing projections by 37,087 million pesos—oil-related income fell short. The government collected only 227,519 million pesos from oil, a 13.8% decrease compared to the previous year and 100,325 million pesos below projections.
This shortfall led to a 63,249 million pesos deficit in total public revenue, which grew annually by 11%.
Production Shortfalls
The low oil revenue is primarily due to Pemex’s production shortfalls. In the first quarter, liquid hydrocarbon production averaged 1.69 million barrels per day, which is 9.4% below the approved target. Crude oil production also dropped by 8%, averaging 1.4 million barrels per day.
“Pemex’s persistent underperformance not only affects production targets but also directly impacts oil revenue, which continues to fall short of the projections set by the Secretaría de Hacienda y Crédito Público (SHCP),” México Evalúa stated.
Government Support and Benefits
From 2019 to 2025, total oil-related income decreased by 5.5%. However, the impact on federal government oil income was more severe, with a 55.5% reduction. Meanwhile, Pemex’s income increased by 84.1% during the same period.
This improvement in Pemex’s income is attributed to tax reductions and financial transfers to help the company meet its contractual obligations in recent years, including this year.
Despite receiving more oil-related resources from Pemex in the first quarter of 2025 compared to 2024, the federal government maintained a policy of returning part of the oil revenue through financial transfers.
According to Hacienda’s data, Pemex utilized more than half of the budget line approved by the Union Congress in the first quarter of 2023. This year, Pemex was granted a budget line of 136,000 million pesos to help pay off its debt.
Out of these resources, Pemex used 80,000 million pesos, accounting for 59% of the total resources.
Key Questions and Answers
- What is the main issue affecting Mexico’s tax income? Pemex’s production shortfalls have led to lower-than-expected oil revenue, impacting the government’s ability to increase tax income.
- How much did Pemex fall short of its production targets in Q1 2023? Liquid hydrocarbon production was 9.4% below the approved target, and crude oil production dropped by 8%.
- What is the impact of Pemex’s improved income on federal government oil income? While Pemex’s income increased by 84.1% from 2019 to 2025, federal government oil income decreased by 55.5% during the same period.
- How has the federal government supported Pemex financially? The government has provided tax reductions and financial transfers to help Pemex meet its contractual obligations, including debt payments.
- What percentage of the approved budget line did Pemex utilize in Q1 2023? Pemex used more than half (59%) of the 136,000 million pesos budget line approved for debt payment assistance.
