Mexico’s state-owned oil company, Petróleos Mexicanos (Pemex), is sitting on a massive debt pile that could spell trouble for the country’s economy. Suppliers to Pemex are reporting that the company owes them around 1 trillion pesos.
This debt is for services and materials already delivered but not yet invoiced, so it doesn’t show up in the official records. The Mexican government has acknowledged a debt of 506 billion pesos as of last year, but suppliers say the real figure is much higher.
Pemex’s debt is putting suppliers in a tight spot
Companies that supply Pemex are struggling to stay afloat because they aren’t being paid. One business owner said many firms won’t survive even if Pemex pays up tomorrow – the damage is already done. These companies still have to pay taxes and employee benefits, and some have taken out loans to keep operating.
The situation is so bad that some suppliers are worried they’ll have to shut down or liquidate their businesses. This could have a ripple effect on the economy, particularly if other companies that rely on them are affected.
The bigger picture: Mexico’s national debt
The debt crisis at Pemex could push Mexico’s national debt to 18.8 trillion pesos by 2025. That’s according to the Institutional Revolutionary Party (PRI) lawmakers. If the true extent of Pemex’s debt is revealed, the government might have to step in to bail out the company. This could push the national debt even higher – to 19.3 trillion pesos.
The consequences could be severe. Mexico’s credit rating could take a hit, making it more expensive for the country to borrow money. In 2024, Pemex reported losses of 620.6 billion pesos, a significant drop from the 8.2 billion pesos profit it made in 2023. The company’s hydrocarbon production also fell by 6.3% compared to the previous year.
Some of the key issues driving Pemex’s financial woes include:
- A significant increase in debt to suppliers, with some estimates suggesting a 200% rise
- Declining hydrocarbon production, leading to reduced revenue
- Substantial losses in 2024, marking a significant reversal from the previous year’s profit
If the situation isn’t addressed, it could have far-reaching consequences for Mexico’s economy.