Mexican government gives Pemex $3.5 billion fiscal support

FILE PHOTO: Visit of Mexico's president Andres Manuel Lopez Obrador to Pemex's Cadereyta refinery
FILE PHOTO: A logo of the Mexican state oil firm Pemex is pictured at Cadereyta refinery, in Cadereyta, on the outskirts of Monterrey, Mexico August 27, 2020. REUTERS/Daniel Becerril

February 23, 2021

MEXICO CITY (Reuters) – Mexico’s government has granted new fiscal support to Petroleos Mexicanos (Pemex) worth 73.28 billion pesos ($3.54 billion), to help shore up the state oil firm’s finances and crude output.

The government published the so-called fiscal stimulus figure in its official gazette on Friday afternoon.

Last week, a senior Mexican official told Reuters that a package worth about $5 billion was being prepared for Pemex, comprising a tax break worth roughly 75 billion pesos and a capital boost of some $1.3-1.6 billion.

A senior official said on Monday the stimulus was the tax break, and would be applied gradually from February onward.

The new stimulus comes in addition to a gradual reduction to the tax burden shouldered by Pemex, which has financial debts of some $110 billion, and whose financial rescue is one of President Andres Manuel Lopez Obrador’s top priorities.

The government said the fiscal support was needed to help lift oil output and offset negative economic conditions stemming from events linked to the global public health emergency.

Neither Pemex nor the finance ministry responded to requests for comment on the stimulus announcement on Monday.

(Reporting by Ana Isabel Martinez; editing by Jonathan Oatis)