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2019 national budget leaves 118 Pemex projects without funds

More than MXN$92 billion for infrastructure projects were reassigned in the 2019 government budget

The Ministry of Energy (SENER) ordered the Energy Regulation Commission (CRE) to delay the entry into force of UBA diesel distribution - Photo: File photo/EL UNIVERSAL
02/01/2019 |13:18
Noé Cruz Serrano
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The federal government of Mexico has left 118 projects of Pemex Industrial Transformation (TRI) without funds . Said projects were meant to prioritize the programs included in the National Refinement Plan , which was announced in early December by President Andrés Manuel López Obrador .

Some of the programs that will receive a higher share of the federal budget include maintenance for all six refineries and the development of the studies needed to build the new Dos Bocas refinery , as well as creating a reserve for the engineering, procurement, and construction of the new plant in the state of Tabasco .

According to information from the Investment Unit at the Ministry of Finance and Public Credit (SHCP) , more than 92 billion pesos for infrastructure projects were reassigned in the 2019 government budget , even though many of them had committed resources.

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Such is the case, for example, of the Fuel Quality project, which required an investment of MXN$2.65 billion and will now be delayed for at least one year.

The committed investments of this project were meant to develop and supply “Premium” (93 octanes) and “Magna” (87 octanes) gasoline with ultra low sulfur content (UBA status) .

The ministry also pointed out the relevance of fuel quality assessment in the Madero, Minatitlán, Salamanca, Salina Cruz, and Tula refineries, which was also left without funds.

This will deeply affect the modernization of refineries and diesel hydrodesulphurization plants , as well as the construction of new plants aimed at producing UBA quality fuel of 15 parts per million (ppm), a project that would have received MXN$17.6 billion this year .

As a consequence, the Ministry of Energy (SENER) ordered the Energy Regulation Commission (CRE) to delay the entry into force of UBA diesel distribution, a decision that, according to the legal instrument SENER/NRGG/039/2018 , was meant to “avoid financial and property damage to Mexican Petroleums (Pemex) for non-compliance of legal mandates,” since in Annex 1, numeral 13 of the NOM-016-CRE-2016 instrument , it was required that the oil company should distribute said type of fuel used for public transport.

The project that had requested the most resources for 2019, with MXN$30.63 billion , was a plan for wastes recovery at the Tula refinery in the state of Hidalgo. However, it was also left without funds.

A total of 113 projects were classified in the approved federal budget as “Investment Programs and Projects Registered without Allocation of Resources in 2019.”

In 2019, the new refinery project will absorb MXN$51.92 billion thanks to the resource allocation. Another MXN$10.53 million will be used to provide maintenance for all six existing refineries as part of the new administration’s commitment to boost domestic oil production.

Furthermore, the government will continue production capacity maintenance projects in the Tula, Salina Cruz, Madero, and Salamanca refineries , though with some lags in its completion, since another MXN$11.18 billion have been reassigned.

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