Friday, July 12, 2024

López Obrador vows self-sufficiency in gasoline by 2023

President López Obrador has pledged that Mexico will be self-sufficient in gasoline by 2023 through the rehabilitation of Mexico’s six existing refineries and the construction of a new one on the Tabasco coast.

“We will be self-sufficient in the production of gasoline and we won’t sell crude oil anymore,” he said Saturday while speaking at the Pemex refinery in Minatitlán, Veracruz. “All the raw materials will be processed in our country; that’s why [we have] this plan to rehabilitate the six existing refineries.”

López Obrador said that a total of 25 billion pesos (US $1.2 billion) will have been invested by the end of the year to boost the capacity of the refineries at Minatitlán, Veracruz; Salina Cruz, Oaxaca; Tula, Hidalgo; Ciudad Madero, Tamaulipas;  Cadereyta, Nuevo León; and Salamanca, Guanajuato. The new refinery on the Gulf of México coast is expected to cost around US $8 billion.

“The plan is to process an average of 1.2 million barrels per day in the six refineries … and 340,000 additional barrels per day in the new Dos Bocas refinery. All this, I repeat, by 2023,” López Obrador said.

An Energy Ministry document reveals an even more ambitious goal: processing 1.2 million barrels of crude per day not by 2023 but by December this year. To achieve that, gasoline production in December will have to be double the average in 2019 when 592,000 barrels of crude were refined per day at the six Pemex refineries.

In the longer term, the government is also planning to build new refining infrastructure at La Cangrejera – a petrochemical plant in Coatzacoalcos, Veracruz – to help achieve López Obrador’s goal of gasoline self-sufficiency. Energy Minister Rocío Nahle said Saturday that high-octane gasoline will be produced at the plant.

The idea of building new infrastructure at La Cangrejera to increase refining capacity has been around for more than a decade but the state oil company concluded that the project would be too complex and costly, and that there wouldn’t be enough crude to supply it.

However, López Obrador appears intent on achieving gasoline self-sufficiency whatever the cost. The president has repeatedly pledged to “rescue” Pemex and the Federal Electricity Commission from the years of abuse he says that suffered during past governments.

Energy sector analysts have criticized the government’s plan to pour money into rehabilitating the existing refineries and building a new one, arguing that it will divert funds from Pemex’s more profitable exploration business.

But López Obrador on Saturday once again rejected the claim that Mexico is better off sending crude abroad when it has to purchase gasoline, mainly from the United States, to meet domestic demand.

“There are still fools that say that it’s better to sell crude oil even though we have to buy gasoline. They forget that if we process our own raw materials jobs are created here,” he said.

López Obrador also said that people who are in favor of selling crude abroad rather than refining it in Mexico fail to take into account the transportation costs of getting the oil to foreign refineries.

Source: El Norte (sp), Expansión (sp), Forbes México (sp) 

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