Gasoline demand in Mexico continues to hold up amid a stagnant economy and growing numbers of fatalities caused by the coronavirus pandemic.
Sales of gasoline stood at 668,000 b/d in the week ended Sept. 25, the latest data available from the energy ministry showed. Despite being 15% or 119,000 b/d below 2019 levels, it has remained practically unchanged since the end of June, the data showed. According to Apple's latest Mobility Trends Report, driving in Mexico during last month was 16% lower from a year earlier period.
Mexican gasoline demand will average around 680,000 b/d for the full 2020, according to S&P Global Platts Analytics, an annual contraction of roughly 120,000 b/d. Demand growth is set to resume in 2021, aided by the much lower base set in 2020 and gradual normalization of economic activities. However, overall demand levels stay below recent history for most of the year. Platts Analytics projects 2021 Mexican demand to reach 755,000 b/d.
The latest economic indicators show the Mexican economy has not fully recovered from the impacts of the coronavirus pandemic and is lacking dynamism.
Most of the indicators are between 10% and 15% below 2019, James Salazar, economic analysts at Mexico-based CI Banco.
"The only recovery we have seen is in consumer confidence. The horizon is uncertain with risks of deterioration," said Salazar, who expects the economy to contract 9% in 2020.
Comparable sales at the county's department stores, including US giant Walmart recorded their fifth straight month of year-on-year decline in September, data from the industry's association ANTAD showed. Manufacturing of vehicles for exports also lost steam in September, official data showed, that fell 4% on a sequential basis after three months of recovery.
Supply steady
Imports of gasoline, mostly by state controlled Pemex, remained unchanged in September on a monthly comparison at 461,000 b/d, although it is down 16% compared to 2019, the data showed.
Production also remained unchanged. On the last week of September, the company produced 214,000 b/d, the data showed. Pemex managed to maintain production of gasoline through September, despite recent output declines at Tula, one of the six refineries, data showed.
The Mexico administration has embarked on a quest to increase its refining capacity to eventually stop importing fuels, mainly from the US. The country is building a new refinery and recently announced plans to upgrade two of the existing ones by adding coking capacity.
