Fuel stockpiles returning to pre-COVID-19 levels in Mexico

Inventories of hydrocarbons in storage in Mexico are returning to pre-COVID-19 levels after nearly maxing out in April and early May as fuel consumption is picking up due to economic re-activation.

The latest energy ministry (Sener) data on stockpiles indicate liquid hydrocarbons in storage had fallen to 12.5Mb (million barrels), including 6.38Mb of gasoline and 3.5Mb of diesel.

These levels are comparable to the storage of nearly 6.43Mb of gasoline and 2.36Mb of diesel on March 7, ahead of pandemic-related lockdown protocols.

Mexico has total petroleum product storage capacity of 28.9Mb. However, storing capacity of 17.3Mb is available for liquid hydrocarbons.

Reduced mobility associated with the lockdown reduced local fuel sales to 813,000b/d, from 1.3Mb/d sold the third week of January, according to Mexican energy news outlet Oil and Gas Magazine.

Evolution of hydrocarbons in storage. Source: Oil and Gas Magazine

Plummeting demand worldwide drove Mexico's oil stockpiles to 15.2Mb in the third week of April, equivalent to 90% of the total available crude storage capacity.

Because of this, state oil firm Pemex’s international sales division PMI canceled gasoline imports from various refiners, reducing the amount of inventory in the storage and distribution terminals of Pemex Transformación Industrial (PTI) and private companies. 

The move prevented the country's storage and distribution terminals from becoming saturated and allowed the company to increase crude processing at its six refineries from 464,000b/d at the start of the crisis to 640,000b/d in May.

Storage policy lawsuits

Local firms are resisting a separate policy, going into effect in July, meant to shift some of the storage burden held by Pemex and its subsidiaries. Pemex is managing 92% of oil storage in the country.

Overall, 11 legal motions were filed to suspend the “public policy for the minimum storage of petroleum products,” local outlet El Sol de México reported. The litigants claim the new regulation threatens their competitiveness.

The provision applies to entities that sell fuels to the public and demands marketers and distributors of gasoline, diesel and jet fuel be able to store a minimum inventory equivalent to five days of sales for gasoline, three days for diesel and a day and a half for jet fuel.

The litigants include Grupo Comercial México, Combustibles del Bajio, Combustibles de Oriente and Nieto Energy Group, according to the outlet.