News
26/08/18
Northwest Mexico fuel sales fall 13pc in June
Northwest Mexico fuel sales fall 13pc in June
Mexico City, 18 August (Argus) — Retail gasoline and diesel sales fell by 13pc
across Mexico's northwestern states in June, with Baja California, Baja
California Sur, Sonora and Chihuahua states all posting declines from a year
earlier as gasoline and diesel demand weakened throughout the region. Combined
retail fuel sales in the four states fell to about 137,500 b/d in June from
158,500 b/d a year earlier, according to Argus calculations using the latest
data from the national energy commission (CNE). Baja California remained the
region's largest fuel market and recorded the steepest decline among the four
states, with total demand falling by 14pc to 47,000 b/d from 55,000 b/d a year
earlier. Baja California Sur also posted a 14pc decline, with fuel demand
falling to 11,500 b/d from 13,500 b/d. Chihuahua's fuel sales fell by 12pc to
44,000 b/d from 50,000 b/d, while Sonora recorded a 12pc decline to 35,500 b/d
from 40,500 b/d. The figures cover sales through retail fuel stations operating
under the state-owned Pemex brand and other private brands. They exclude diesel
supplied directly to industrial consumers and self-supply users, which account
for a substantial share of Mexico's diesel demand. The data therefore reflect
retail fuel demand rather than total consumption. Gasoline accounted for most of
the decline across the four states. Combined regular and premium gasoline demand
fell by 14pc to about 107,000 b/d from 125,000 b/d a year earlier. Regular
gasoline sales declined by 11pc to 92,000 b/d from 104,000 b/d, while premium
gasoline demand fell by 28pc to 15,000 b/d from 21,000 b/d. Baja California
recorded the steepest decline in volume terms. Combined regular and premium
gasoline demand fell by 15pc to 38,500 b/d from 45,500 b/d a year earlier.
Chihuahua followed, with gasoline demand declining by 13pc to 33,500 b/d from
39,000 b/d. Sonora's gasoline sales fell by 13pc to 26,000 b/d from 30,000 b/d,
while Baja California Sur recorded a 14pc decline to 9,000 b/d from 10,500 b/d.
Diesel-related fuels also weakened throughout the region. Combined sales of
diesel and ULSD fell by 9pc to about 30,500 b/d from 34,000 b/d a year earlier.
All four states posted lower diesel demand, in contrast to Nuevo Leon, where
retail diesel sales rose in June. Premium gasoline recorded the steepest decline
among the region's major fuel categories. Sales fell by 28pc across the four
states, compared with an 11pc decline in regular gasoline demand. Baja
California posted the largest loss in premium volume terms, while Sonora, Baja
California Sur and Chihuahua recorded similar declines. The June data suggest
fuel demand weakened across a broad section of Mexico's northern region.
Consumption declined in border markets such as Tijuana, Mexicali, Juarez and
Nogales, as well as in tourism-oriented Baja California Sur, indicating the
slowdown was not confined to a single state. Northwestern Mexico is supplied
through a combination of Pacific coast shipments and cross-border imports.
Pemex's Pacific logistics system moves fuel produced at the 330,000 b/d Salina
Cruz refinery, as well as imported product, by tanker to terminals including
Rosarito, Guaymas and La Paz. Rosarito is connected by pipeline to Ensenada and
Mexicali, while Guaymas supplies Hermosillo and Ciudad Obregon in Sonora, with
tank trucks serving other inland markets. Chihuahua can receive US product
through the El Paso-Ciudad Juarez corridor, as well as supply moving north from
Gomez Palacio, Durango state. Private-sector companies supplement Pemex through
marine, pipeline, rail and truck imports. US projects could reshape supply Fuel
flows in western US are also being reshaped after the closures of Phillips 66's
139,000 b/d Los Angeles complex and Valero's 145,000 b/d Benicia refinery
removed about 17pc of California's refining capacity. The losses could tighten
export availability and increase competition for Pacific coast cargoes in the
near term, particularly for Baja California. But they are also prompting
projects intended to move Midcontinent and US Gulf coast supply west, reducing
Arizona's historical dependence on southern California. Phillips 66, Kinder
Morgan and HF Sinclair reached FID this month on the $5bn, 230,000 b/d Western
Gateway system, targeting completion in 2029. The project would move fuel
through a new pipeline from Borger, Texas, to Phoenix, Arizona, before sending
some volumes west into California through a reversal of Kinder Morgan's existing
SFPP West line. Oneok is separately considering its proposed 200,000 b/d Sun
Belt Connector from El Paso, Texas, to Phoenix, while HF Sinclair is evaluating
a first-phase expansion that could add 35,000 b/d of capacity to move Rocky
Mountain supply into Nevada. None of the projects include a Mexican extension,
but El Paso and Tucson, Arizona, are established supply points for fuel moving
into northern Mexico. Additional supply at those hubs and in southern California
could become available to buyers in Chihuahua, Sonora or Baja California through
existing cross-border logistics, depending on prices and import regulations. By
Cas Biekmann and Antonio Gozain Send comments and request more information at
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