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  • Mexico to Protect Pemex with Stabilization Funds

    | Photo: Reuters

Published 14 April 2019

The Mexican Government aims to shield Pemex with stabilization funds, which were created to moderate the effects on public finances if international oil prices were to suddenly change. 

Mexico's Ministry of Finance reported on Saturday that the Government of President Andrés Manuel López Obrador (AMLO) is seeking to use its stabilization funds to support Petróleos Mexicanos (Pemex). 

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The stabilization funds, which are the equivalent of US$5 billion, were initially put aside in case of an emergency. 

The Ministry of Finance denied that the government will absolve Pemex's total debt, since it is one of the most indebted in the world.

Pemex is also at risk of losing its investments due to corruption and low levels of oil extraction and refining.

The Secretary of Finance and Public Credit, Carlos Urzúa, said on Friday that some credit rating agencies insist on demeaning Pemex, including the US-based Standard & Poor's (S&P).

Urzúa stressed  that the financial decision of the Mexican Government aims to shield Pemex with stabilization funds, created to moderate the effects on public finances if international oil prices were to suddenly change.

The Mexican President is carrying out a plan to recover the oil company, which contemplates the reduction of the tax burden and capitalization, and stops the theft of fuel.

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