VISIÓN DEL MERCADO DE REFINADOS
Mexico has a growing demand for refined products and depends heavily on imports, creating favorable market conditions. Fuel demand is largely driven by the transport sector, followed by electricity generation and industry needs
FAVORABLE MARKET CONDITIONS
Mexico is increasingly relying on fuel imports to satisfy growing demand and balance declining refined product output.
Projects that focus on importing refined products are to be successful for several reasons:
· Overall expected population growth.
· In 2019 domestic crude production fell to record lows of 1.7 Mbbl per day.
· The average of utilization rate for the 6 refineries in Mexico was 40% in 2019.
FUEL IMPORTS
The decrease in Pemex’s oil production and the low utilization of refinery capacity are the main reasons that explain the growth of fuel imports.
Over the past years, the volume of imported gasoline and diesel has been induced by multiple factors, such as:
· Fuel production is related to the country’s refining capacity. The National Refinery System (SNR) average utilization in 2019(1) was only 40%, due to nonscheduled stops, maintenance, delays in the rehabilitation of the refineries, among other factors.
· The oil output of Pemex does not comply with the standards of quality needed for the refineries, leading into significant operational issues.
CONCENTRATION AND GEOGRAPHIC DISTRIBUTION
Mexico has a high population density per service station compared to other economies; with an average ratio of 3.7 thousand vehicles per service station.
Due to the high population density per service station, Mexico represents major opportunities for development compared to a more mature market such as Argentina, Brazil and the United States.
SITUATION SNAPSHOT
Due to recent modifications on Oil & Gas policies in Mexico, new business opportunities have arisen, and with the growing demand and evolving market, there is broad interest and support to pursue such opportunities.
Mexico is the 7th gasoline consumer of the world1.
Ranked 3rd most developed Latin American economy by the IMF, considering its main constraints for doing business: corruption, bureaucracy and crime rates (2).
Mexico is one of the top importers of refined petroleum products in North America (3).
Import flows of these products will grow as the demand increases and the domestic production remains in historical lows.
The national demand is located ~ 50% in the Centre of the country, ~20% in the Northeast and the rest scattered across several relatively small and isolated areas.
The logistic system is completely undersized across all the regions of the country, and the main players do not have investment capabilities.
Enormous pool of opportunities based on current logistic problems e.g. not dependent upon the profile of future growth demand.
1 U.S. Energy Information Administration
2 IMF Regional Economic Outlook.
3 Feenstra, R. C., et al. (2005). World Trade Flows, 1962–2000. NBER working paper 11040.
GALCA ENERGY, S.A.P.I. DE C.V.
HEGEL 512, COL. POLANCO V SECCIÓN
ALCALDÍA MIGUEL HIDALGO
CIUDAD DE MÉXICO, C.P. 11550