Mexico City — Mexico’s economy demanded the highest level of fuel oil in the last two years in June, according to the most recent figures from the Energy Ministry (Sener).
Demand in June hit 102,000 barrels per day of fuel oil - an oil residue with which the state-owned company Petróleos Mexicanos (Pemex) loses money - during June, a level of demand not seen since May 2021.
Demand for fuel oil rose 64% month over month, and 30% year on year.
Fuel oil is a highly pollutant oil due to its high sulfur levels and is mainly used to produce electricity, although international environmental regulations are curbing its use.
Pemex has found an appetite for it in international markets, mainly in US refineries, in addition to selling it to the state-owned power utility CFE.
The Mexican oil company is trying to reduce its fuel oil production levels and increase gasoline and diesel production at its six refineries, in addition to the expected start-up of the Dos Bocas refinery in Tabasco this year to comply with the Mexican government’s fuel self-sufficiency policy.
However, the two main projects to reduce fuel oil production, the coking plants at the Tula and Salina Cruz refineries, are facing delays in their construction, with their start-up forecast for 2024 and 2025, although President Andrés Manuel López Obrador has said that they will be ready this year and next.
Pemex CEO Octavio Romero Oropeza told Bloomberg Línea in October 2022 that the plants were facing delays. But López Obrador declared in his speech commemorating his election victory earlier this month that the plants would be ready during his six-year term.
The Mexican president pledged to make Mexico self sufficient in gasoline and diesel supply, as producing oil and buying gasoline from abroad, as the country currently does, is like growing oranges and buying juice, he said. Furthermore, fuel prices will drop when the country’s refineries are at full capacity and the Dos Bocas facility is up and running, he added.
