Pemex, its corporate, financial and productive restructuring and its effects on the oil trade balance

Abstract

In this investigation we show how the different energy reforms that have been implemented in Mexico, by gradually linking the price of domestic fuels to international market prices and to the domestic tax structure, have tended to distort the domestic price and production of gasoline, all of which has been inclined to decapitalize Pemex, to reduce domestic refining capacity, and to accelerate the amount of gasoline imports. This investigation is divided in four sections. The first analyzes the evolution of both the organization and the business model of Pemex, where a criteria of economic efficiency, openness and increasing dependence on private capital currently predominate. The second studies the intra-organism prices and the factors that have generated distortions in the components of these prices. The third is dedicated to the analysis of the most important components of the country's oil trade balance. From this analysis and with econometric models, we obtained two estimates of the changes in income and price elasticities of demand for oil imports. The fourth section presents the final reflections with the objective of proposing energy policy alternatives applicable to the reality facing the country.