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As Mexico’s state-owned oil company Petróleos Mexicanos (Pemex) continues to bet big on its crude oil refining future through its controversial under-construction Dos Bocas refinery and its official acquisition of the Texan Deer Park refinery at the beginning of 2022, Pemex has seemed to have dealt itself a losing hand. According to new data, Pemex’s refining operations reportedly lost 223 million pesos per day between January and September 2022 – that is, an operating loss of 9 million pesos per hour.

Despite the sky-high demand for oil and subsequent rocketing price per barrel of oil at the beginning of the year, Pemex as a whole still managed to lose a purported total of $3.5 billion throughout the first nine months of 2022, while U.S. refineries such as Valero and Marathon earned $3.81 billion and $4.62 billion during the same time period.

Mexico managed to reach an annual high in oil production in 2022’s third quarter while producing 802,000 barrels of oil and 278,900 barrels of fuel oil per day, yet still lost $7.37 per barrel throughout the third financial quarter.

According to industry experts, Pemex’s major losses are likely a result of Mexico’s attempts to entirely nationalize its oil-production processes, which has caused the nation to process massive amounts of crude oil that in turn only produce both high levels of fuel oil and invaluable waste – all while burning billions of dollars worth of natural gas along the way.

“Beyond this operational circumstance, the apparent paradox draws attention that at the same time that Pemex Transformación Industrial (TRI) significantly increases its sales volume and recovers important portions of the national fuel market, it registers its first negative refining margin in more than two years and a net loss of 61.8 billion pesos, despite the high prices of oil products,” oil sector analyst Fluvio Ruiz Alarcón told daily Mexican newspaper Reforma.

Mexican Institute for Competitiveness (IMCO) Sustainable Economy Director Jesús Carrillo went on to say that Pemex’s insistence at producing low-value fuels while hiring excessive numbers of personnel also contribute to Mexico’s refining losses, while also commenting that Mexico’s hemorrhaging oil margins is all the more concerning when considering the global oil industry’s continued profits.

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