EconomyFinancialHow is AMLO's fuel self-sufficiency plan going? Four graphs...

How is AMLO's fuel self-sufficiency plan going? Four graphs explain it

President Andrés Manuel López Obrador has endorsed it once again: his strategy to achieve energy self-sufficiency continues. The federal government’s plan, which was again announced during the 84th anniversary of the Oil Expropriation, dictates that as of 2023 the country will end oil exports and the national demand for gasoline, diesel and jet fuel will be produced entirely in the country.

But the process to achieve the presidential goal has been full of ups and downs and some of the objectives have not been met. We explain how the path to self-sufficiency has progressed in four graphs:

The use of refineries

The presidential speech has continuously assured that the six refineries of the state-owned Pemex were abandoned during the previous six-year terms and that during this administration the use of these complexes has increased.

The latter is true, according to company data. But processing figures are still below the company’s goal. The plan of the Secretary of Energy was based on processing between 900,000 and one million barrels from the end of 2019, but the six complexes still do not register the promised processing, according to the latest data. In January, refineries processed 800,000 barrels per day.

This afternoon Rocío Nahle, the Secretary of Energy, assured that the refineries are currently processing 1,100 million barrels per day, but at the moment this figure is not yet found in any official database.

Gasoline production on the rise

The state company’s six refineries have increased gasoline production, although it has not been able to sustain itself in an upward streak.

Since last September, gasoline production has remained above 250,000 barrels per day. In January –the latest figure available– the production of gasoline was 271,000 barrels per day. Diesel production has also been on the rise in recent months, but has not been constant.

But during the six-year term, fuel production has also had very low periods. In July 2020, in the midst of the height of the pandemic, refineries reported a production of 145,000 barrels per day.

Analysts have assured that the commitment to produce more fuels will have a high cost for the oil company due to the inefficiency of its complexes and its cost structure, since the refineries operate with a large number of personnel and the barrels of oil are not completely well used.

Side b: more fuel oil

Producing more fuels has also brought an increase in the production of fuel oil, a by-product of refining that does not have a great value in the market.

For more than a year and a half, the state company produced more fuel oil than gasoline in its refineries. The trend started from August 2020 and until November of last year. The national oil company has six refineries, three of which have contributed the most fuel oil in recent months: Salamanca, Tula and Salina Cruz.

During that period, about 30% of refinery production was fuel oil.

The future of exports?

The presidential discourse regarding crude oil exports has been evolving. During 2020 the plans were based on reducing exports to a third of production by 2024. But now the administration has assured that it will end shipments abroad to focus its production on the use of its refineries.

Last January was the first month that plan began to be tangible. Pemex exported 832,000 barrels per day during that month, the lowest figure the company has recorded.

Although, the increase in the price of oil, derived from the geopolitical conflicts in Eastern Europe, could change the presidential plan. The federal government has begun to show signs of relaxation in its discourse regarding shipments abroad.

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