More than 60 oil tankers carrying approximately 18 million barrels of fuel are off the Mexican coast waiting for storage space to be freed up to unload, for which high fees are being paid for each day of waiting.
Most of those vessels carry gasoline and diesel imported by state-owned Petróleos Mexicanos, people familiar with the situation said. With daily fines of about $40,000 per ship for each day of waiting, the cost for fuel importers stuck in line runs to about $2.4 million a day, with Pemex bearing the lion’s share, the people said.
In fact, as imports grow, the tanker backlog has risen to more than three times the usual volume, one of the people said. The approximately 60 vessels on standby have enough fuel to meet around 60% of the country’s monthly demand. The last time the gridlock was this strong was in early 2020, when the Covid-19 pandemic forced Mexico to declare force majeure on imports, as demand for fuels plummeted, the people said. Pemex did not immediately respond to a request for comment.
Congestion at sea is the result of several combined factors in addition to the lack of available storage. The Mexican government earlier this year announced fuel subsidies designed to control inflation, which importers such as Pemex’s trading unit PMI are using to offset the cost of fuel purchases abroad. At the same time, Pemex increased its purchases of gasoline and diesel to meet the expected rise in demand as the pandemic progresses, in addition to stocking up before the worst of the hurricane season.
Meanwhile, Mexico’s refineries are operating at less than half capacity amid maintenance activities, resulting in a need to boost imports. In June, Pemex imported some 888,000 barrels of refined products, a record this year, with gasoline purchases rising 17% compared to May, and diesel purchases rising 34%.
“It makes sense for them to err on the side of caution in their quest to secure supplies because if a hurricane hits the Gulf of Mexico, they could be in serious trouble,” said Felipe Pérez, director of downstream at S&P Global Inc. in Los Angeles. “Domestic gasoline inventories in Mexico are a bit tight.”
Gasoline inventories are enough to meet nine to 10 days of demand, Pérez said. By comparison, the US has enough reserves to meet 25.8 days of demand, according to the Energy Information Administration.
