The state company of Petróleos Mexicanos will receive resources from the Government of Mexico to increase the company’s productivity.
The Government of Mexico announced that it will inject resources into the state-owned company Petróleos Mexicanos for an amount of 5,538 million dollars.
This was announced by President Andrés Manuel López Obrador, along with officials from Pemex and the Ministry of Finance and Public Credit, during his morning conference on Friday, February 15.
The government’s strategy to rescue the state oil company includes four points: 1) The capitalization that the federal government is making via the budget; 2) Monetization of labor liabilities through pensions; 3) Reduction of the tax burden and 4) Income due to combat fuel theft.
According to officials, the most important announcement is the tax incentive for Pemex, which will allow greater tax deductibility for the company, which will represent a decrease in the fiscal burden of 15,000 million pesos (774 million dollars).
The Secretary of Doing, Carlos Urzúa, indicated that Pemex contracted a debt of 843,000 million pesos (43.584 million dollars) in the past six years, which is equivalent to a figure between 3% and 4% of the Gross Domestic Product of Mexico in 2019 .
“That’s a fabulous amount of money that we still do not know where it went,” Urzúa said, noting that a large part of this debt has been squandered due to corruption. Therefore, explained the official, instead of raising the productivity of the company, had a fall in recent years.
In this sense, President López Obrador lashed out against the “technocrats” who endorsed the “looting” of Pemex and its support for the energy reform.
“The technocrats who bet on privatization, who are jointly responsible for the bankruptcy, the failure of Pemex, are now in a position of skepticism, that is not going to be able to, that Pemex’s debt is too much, that it will be impossible to rescue Pemex, “said López Obrador.
“I accept the challenge, we will move forward with Pemex, it will be a productive company that will have profits and profits,” added the Mexican president.
An increase in investment of 36% was also announced for 2019 compared to the previous year, in addition to the company not contracting debt.
4 keys to the Pemex rescue plan
From the support that the government will give, to the benefits that the oil company will obtain; this is what you have to know about strengthening Pemex.
The Mexican government announced a strengthening plan for Petróleos Mexicanos ( Pemex ), which involves more investment and a reduction in the tax burden.
What will be the government’s support for Pemex ?
The government will support Pemex with four amounts of money: 25 billion pesos, by capitalization; 35 billion pesos, due to the monetization of promissory notes (labor liabilities); 32 billion pesos, due to expected revenues from the fight against fuel theft; and 15 mmdp, by reducing the tax burden.
In total, by 2024, the government would have saved Pemex by 90 billion pesos due to the reduction in the tax burden, accumulated annually.
It is estimated that in total Pemex receives government support of up to 107 billion pesos.
What will be the benefits for Pemex ?
Pemex will invest 36% more in oil extraction than in real terms was invested in 2018
In that year, Pemex invested 204.6 billion pesos. But, for this 2019, the oil company will invest 288.1 billion pesos.
Will Pemex acquire more debt?
According to the federal government, the company will not hire new debt and start paying the existing one: from 2013 to 2018, the average annual debt was 140.7 billion pesos. In 2019, it will be 0.
Carlos Urzúa, Secretary of Finance and Public Credit, said at the morning press conference that in that period an equivalent to “between 3% and 4% of GDP” was acquired.
How will the SHCP compensate the resources?
Urzúa explained that the estimates of the Income Law of the Federation 2019 do not include the expected earnings for the work of the tax authority.
The SHCP plans to implement measures to compensate resources by means of tax simplification, innovation applied to oversight and the elimination of evasion spaces.
Source: reuters, notimex, lasillarota
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