Pemex Defers Tax Payments Amid $100 Billion Debt Struggle

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Mexico has granted Pemex (officially known as Petroleos Mexicanos) a deferral for its June monthly tax payments, extending the deadline to July 31. This move comes as the government continues to support the state oil giant, which has been burdened by a staggering $100 billion debt for years.

The deferral specifically applies to the so-called DUC levy for May, originally due in June. Although the exact amount of the deferred tax remains undisclosed, central bank data cited by Bloomberg indicates that payments for February and March averaged around $854 million (15.5 billion pesos).

This decision follows the government’s previous move to abolish the levy for Pemex between October 2023 and January 2024. Outgoing President Andres Manuel Lopez Obrador has consistently backed the heavily indebted state oil company during his term.

President-elect Claudia Sheinbaum has pledged to maintain the policy of government support for Pemex.

However, Fitch Ratings highlights that continued support for Pemex poses a significant challenge for Mexico’s new administration. The company’s debt, equivalent to nearly 6% of GDP, remains a substantial contingent liability for the sovereign.

Over the past five years, the federal government has provided approximately US$70 billion (about 4% of 2023 GDP) in support, effectively absorbing Pemex’s debt onto its own balance sheet.

Despite these efforts, meaningful improvements to the company’s operating efficiency are necessary. The incoming administration aims to uphold Pemex’s significant role in the country’s oil market.

Meanwhile, Pemex’s crude oil exports surged by 34% in May compared to April. This increase followed Mexico’s decision to reverse plans to limit exports, prompted by fires at two Pemex refineries that impacted local demand. Refinery processing across Pemex’s six refineries hit a year-to-date low last month, as reported by Reuters.

Source: Oil Price