Sheinbaum Rebukes Energy Chiefs as Pemex Fuel Output Slumps

Mexico's President Claudia Sheinbaum sharply criticised senior energy and finance officials at a late July meeting in the National Palace over the declining performance of state oil company Pemex, according to four people with knowledge of the encounter.

The rebuke came as second-quarter figures showed the company's fuel production falling and the country leaning more heavily on expensive imports, undercutting the president's repeated claims that Mexico had reached self-sufficiency in diesel and was nearing that goal for gasoline.

According to the sources, who spoke on condition of anonymity because of the sensitivity of the discussions, Sheinbaum felt she had been misled. She also pressed her officials on 12 accidents at Pemex refineries this year, which left six people dead and 10 injured.

Energy Secretary Luz Elena Gonzalez and Pemex Director Juan Carlos Carpio, who took charge of the company in May, bore the brunt of the criticism, two of the sources said. The president faulted them for the reputational damage caused by the accidents and instructed Gonzalez to "get things in order."

A spokesperson for Sheinbaum said the president meets frequently with the energy sector but had no further information. Pemex, the Energy Ministry and the Finance Ministry did not respond to requests for comment.

The second quarter marked a significant setback. Pemex's diesel output dropped 11% and gasoline production fell 13% from the previous quarter, while diesel imports surged 134% and gasoline imports rose 45%. Much of the supply came from US refiners, and elevated fuel prices during the US-Israeli war on Iran drove up costs. In value terms, gasoline imports climbed 122% to $4.55 billion, and diesel imports jumped 273% to $1.51 billion.

Accidents have continued to hamper operations. At the Olmeca refinery in Tabasco — the $21 billion flagship project of former President Andrés Manuel López Obrador — electrical failures and fires have recurred. A fire in March, caused by an overflow of oily wastewater, killed five people. Pemex has also reported injured workers at the Madero refinery in Tamaulipas and safety incidents at the Minatitlán refinery in Veracruz, without giving details.

No refinery is running at its designed capacity, according to an analysis of public data and information provided by a Pemex official. The weakest performer, Minatitlán, converted just 39% of the petroleum it processed into higher-value products such as gasoline and diesel in July — an improvement from 24% in June but far below its designed conversion rate of 75%. Olmeca reached 74% in July against a design capacity of 88%, but has recorded rates as low as 41.5% this year.

"Every month we're losing money — some months more, some months less, but we keep losing," said the Pemex official, who spoke on condition of anonymity.

Two days after the tense meeting, Gonzalez met Pemex executives to look for ways to lift fuel production. The executives agreed to weekly reviews of refinery performance and to press plant managers to improve results.

Those measures have not reversed the decline, according to six sources, including the four familiar with the July meeting. They pointed to structural problems: political interference in operational decisions, weakened safety protocols, insufficiently trained staff, shortages of equipment and spare parts, and inconsistent maintenance.

"Pemex workers are saying, 'How do you expect us to operate if you don't give us money for maintenance?'" said Ramses Pech, an energy analyst and consultant. "The company's main problem is maintenance."

In her 2027 budget proposal announced last week, Sheinbaum cut funding for Pemex debt payments, reflecting the government's stated expectation that the company will soon no longer need financial support. Mexico has poured billions of dollars into Pemex in recent years through debt support, tax breaks and financing to help it pay suppliers, betting that production would rise — but output has stagnated as operational problems persist.