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Pemex's premium gasoline output scrapes bottom

04 Apr 2018 17:18 (+01:00 GMT)
Pemex's premium gasoline output scrapes bottom

Mexico City, 4 April (Argus) — Production of premium gasoline by Mexico's state-run Pemex has dropped to a small fraction of the country's demand as the company tries to maximize its production of regular gasoline.

The reasons are as much economic as technical, even in light of the company's struggling refineries.

"In the context of a really bad refining operating environment, what we are trying to do is to maximize the production of regular gasoline the whole refinery system," a manager from Pemex who asked not to be named told Argus. "We want to be as efficient as possible with the production of regular gasoline."

Pemex in February produced 2,090 b/d of premium gasoline, or 1.8pc of the total domestic demand that month. That is still an improvement from January when Pemex's premium production approached zero, at 470 b/d.

But in February 2017, Pemex produced 13,570 b/d of premium — 10pc of the total demand, according to data from the energy ministry of Mexico (Sener).

Of the six refineries in Mexico, all operated by Pemex, only the 275,000 b/d Cadereyta and 315,000 b/d Tula produced premium gasoline in January and February. Madero, Salina Cruz, Salamanca, and Minatitlan did not report premium gasoline production.

The US exported most of Mexico's premium gasoline, supplemented by supply through the Netherlands, in January, according to the latest available statistics from the Mexican department of commerce.

Mexico that month spent $332mn to import 676mn litres (4.2mn bl) of premium gasoline to the country, of which $310mn, or 629mn l, were purchased from the US.

This value alone from January surpassed all of what Mexico spent in 2017 in importing premium gasoline, which totaled $225mn for 467mn l.

Pemex has said for some time that it is using an algorithm to chose the optimal economic decision between producing locally or importing fuel.

"It costs almost the same to produce locally than to bring it from the US," chief executive Gonzalez Anaya said last year. "When it costs more to produce here we import, and when it is the other way around we produce locally."

Most of Mexico's gasoline sales are of regular. Out of the 776,800 b/d of gasoline sold in Mexico during February, 659,500 b/d or 84pc were regular gasoline, and 117,200 b/d were premium.

But shortages of premium gasoline at stations are not uncommon. Prices for premium are only about 8-10pc more at the pump than regular.