Mexico to End Foreign Fuel Imports in Three Years

Mexico to End Foreign Fuel Imports in Three YearsMexico to End Foreign Fuel Imports in Three Years

Mexican President-elect Andres Manuel Lopez Obrador will seek to end the country’s massive fuel imports, nearly all from the United States, during the first three years of his term while also boosting refining at home.

The landslide winner of last Sunday’s election told reporters before attending private meetings with members of his future Cabinet that he will also prioritize increasing crude oil production domestically, which has fallen sharply for years, Reuters reported.

“The objective is that we stop buying foreign gasoline by the halfway point of my six-year term,” said Lopez Obrador, repeating a position he and his senior energy advisor staked out during the campaign.

“We are going to immediately revive our oil activity, exploration and the drilling of wells so we have crude oil.”

On the campaign trail, the leftist former mayor of Mexico City pitched his plan to wean the country off foreign gasoline as a means to increase domestic production of crude and value-added fuels, not as a trade issue with the United States. While he said the facilities will be built in the Gulf of Mexico coast states of Tabasco and possibly Campeche, he has been less clear on how the multibillion-dollar refineries would be funded.

So far this year, Mexico has imported an average of about 590,000 barrels per day of gasoline and another 232,000 bpd of diesel, as output at the country’s domestic refineries has steadily declined.

Foreign gasoline imports have grown by nearly two-thirds, while diesel imports have more than doubled since 2013, the first year of outgoing President Enrique Pena Nieto’s term, according to data from national oil company Pemex.

The six oil refineries in Mexico owned and operated by Pemex are producing far below their capacity, or an average of 220,000 bpd of gasoline so far this year.

Gasoline production at the facilities is down 50% compared to 2013 and domestic gasoline output only accounts for slightly more than a quarter of national demand from the country’s legions of motorists.

During the first five months of this year, Mexican crude oil production averaged about 1.9 million bpd, a dramatic drop compared to peak output of nearly 3.4 million bpd in 2004, or 2.5 million bpd in 2013.

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