Pemex Gasoline Sales to Lag Pre-Pandemic Levels for Second Year

Petroleos Mexicanos expects its gasoline sales won’t fully recover to pre-pandemic levels this year as lockdown measures hurt demand and competitors win market share. While the state-owned company’s gasoline sales are expected to rise this year when compared to 2020, they’ll still lag 2019 levels by about 16%, according to two people with knowledge of the situation, who asked not to be identified because the information isn’t public. Pemex didn’t immediately respond to a request for comment.

Many Mexican motorists are driving less as the country continues to struggle with one of the world’s highest death tolls from Covid-19 and a slow vaccine rollout. Mexico fuel demand fell by more than 70% at the height of the pandemic in April of last year, according to the fuel retailers’ association Onexpo.

Slow Recovery

Pemex sees 2021 gasoline sales below pre-pandemic levels

Sources: Pemex, Bloomberg

Note: 2021 is an estimate

Pemex, which had a monopoly until 2014, has also been losing market share since landmark energy reforms opened the industry to private-sector gasoline retailers that have invested heavily in service stations and storage infrastructure. The number of Pemex’s franchise service stations fell 13% last year to 7,468, representing 57% of the country’s total. An additional 883 service stations are registered under the Pemex brand sub-licensing scheme.

President Andres Manuel Lopez Obrador swept into power promising to strengthen Pemex and roll back his predecessor’s liberalizing measures in order to make Mexico self-sufficient in gasoline production. A bill that’s expected to be approved soon by congress aims to tweak the hydrocarbons law in order to give Pemex more control over the fuel market, and it could potentially help the state company recover market share. On Wednesday, the bill was being voted on in the lower house of congress.

Pemex’s gasoline sales fell 21% last year to 571,200 barrels a day, according to data from the company. In the first two months of this year, average gasoline sales were 513,500 barrels a day, Pemex data showed.

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