Rising fuel imports show need to invest in Mexico's refining sector

With Mexico's fuel imports currently accounting for 68% of total consumption compared with 30% in 2007, the country needs to increase its refining capacity. Rodrigo Favela Fierro, a partner at HCX, said at an event building new refineries in Mexico is an attractive proposition for the private sector and would allow the country to increase its margins in fuel production.

"The refining sector is attractive to investment because there's crude, production is expected to rise and there are markets for refined products, while alliances could be established and synergies sought," he said.

Mexico aims to increase its oil production from an average 2Mb/d at present to 3.4Mb/d over the medium term, energy minister Pedro Joaquín Coldwell said last June.

Fuel imports are also set to swell as the country issues permits to private companies thanks to the energy reform that put an end to state oil firm Pemex's monopoly. Foreign firms have also entered the gasoline retail sector.

Also read: Mexico's dependence on fuel imports set to increase

Favela Fierro said structuring is needed for new processes and plants, as well as investment, and this is not done the country's fuel deficit will widen.

"Investment needs to be made jointly in operations, as well as coking facilities in Tula [pictured] Salamanca and Salina Cruz, and in new capacity, as well as in supply and logistics for the import of fuels and export of crude. Mini refineries could also be built to process onshore production," he said.