Economics: Continuing deterioration of Pemex financial and operational numbers as the government saddles it with objectives but no solutions

MEXICO - Report 17 Mar 2025 by Mauricio González and Francisco González

Pemex experienced further operational and financial deterioration during 2024, according to figures in the company’s latest report, so much so as to put its viability at risk and to become an increasingly onerous burden on the Federal Government. Production of liquid hydrocarbons fell 6.2% (1,759 mbd), and exports were down by 22% (806 mbd), at the same time as crude oil processing and petroleum products production increased (15.9% and 12.6%, respectively), albeit with shrinking margins and generalized losses, except in the company’s logistics division. Total sales were off 2.4% (1.68 trillion pesos), the cost of sales rose 4.4%, and net income evaporated from an 8.2 billion peso profit in 2023 to a -620.6 billion loss in 2024. Financial debt was rolled back 5.1% (97.6 billion pesos) but debt with suppliers grew 37%, or by more than 500 billion pesos, thereby aggravating the liquidity crisis.

The official "energy sovereignty" strategy has raised costs and generated negative cash flows, while the company’s 2024-2030 plan, which includes ambitious investment targets (1.6 trillion pesos) and that of achieving fuel self-sufficiency, lacks any clear solutions, much less defined financing. In this context, the new regulatory framework, to be enacted on March 18, 2025, reinforces state control and the restructuring of Pemex, but fails to address the serious problems faced by the company in terms of its cash flow and over-indebtedness.

In this past week’s economic indicators, we report on the almost three-percentage-point annual contraction in industrial activity for January under the weight of increasingly negative readings from the extractive and construction industries as well as weakness in manufacturing. Moreover, consumer sentiment contracted from a year prior in February as respondents showed an increasingly negative perception of the current state of the Mexican economy and their prospects for being able to make purchases of durable goods in the next six months.

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