View of a gas station in Mexico City.Luis Antonio Rojas (Bloomberg)
Everything indicates that the dream of President Andrés Manuel López Obrador to stop exporting Mexican crude oil to be consumed within the country will not be fulfilled during his presidency. The Ministry of Finance and Public Credit (SHCP) sent Congress on Wednesday a preliminary budget document for 2025 in which they expect Mexico to continue receiving income from oil exports, something that López Obrador promised to end with the idea that oil that is produced in Mexico is consumed within the country.
Mexico will export 958,400 barrels of crude oil daily in 2025, according to the Pre-General Economic Policy Criteria, a pre-budget document that is sent to Congress on September 8. Budget revenues showed an annual increase of 14.5% in February, the Treasury reported, “favored by increases in most of its components, particularly in oil revenues.”
This goes against the plan that the president had for his six-year term, which began in December 2018 and will end in October of this year. His biggest bet has been on “energy sovereignty”, a plan that included, among other things, the purchase of a refinery in the United States and the construction of a new refinery in his home state of Tabasco, with the purpose of stop exporting crude oil. The idea was that oil could be refined in Mexico and in this way the country would be self-sufficient.
The Pre-Criteria concentrate the economic perspectives that the finance portfolio has for the next year. The Treasury expects the Gross Domestic Product (GDP) to grow between 2.5% and 3% this year and slow down in 2025 with an estimated increase of between 2% and 3%. Regarding inflation, the Treasury expects that 2024 will close at 3.3% and the exchange rate will depreciate slightly to close this year at 17.80 per dollar and 2025 at 18.00 per dollar.
The document also proposes a spending reduction of 8.8% in 2025 compared to the current year. This represents an approximate amount of 480,000 million pesos. Since the Pre-Criteria are preliminary, this could change. Otherwise, total government spending, which is currently equivalent to 26.9% of GDP, would be reduced to 24% in 2025.
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