Mexico’s lower house of Congress voted to give Petroleos Mexicanos an even bigger tax reduction than that proposed by the government in the 2024 budget, potentially providing more relief to the indebted state-owned oil company.
(Bloomberg) — Mexico’s lower house of Congress voted to give Petroleos Mexicanos an even bigger tax reduction than that proposed by the government in the 2024 budget, potentially providing more relief to the indebted state-owned oil company.
Lawmakers voted early Friday to reduce Pemex’s profit sharing duty payments to 30%, instead of the 35% proposed in the draft of the budget sent by Mexico’s Finance Ministry, according to a lower house statement. The measure was approved together with the revenue portion of the budget by 260-183 votes, and now moves to the Senate.
The administration of President Andres Manuel Lopez Obrador has been lavishing financial support on Pemex, the world’s most indebted major oil producer. Its tax burden, which stood at 65% before he took office, is currently 40%. In July, it received a $4 billion capital injection from the government.
Read More: Mexico’s AMLO Wants to Lower Pemex Profit Sharing Tax Even More
In the lower house, lawmakers argued that reducing the fiscal burden would allow the company to address the decline in crude production it has faced in recent years and to improve its debt profile. Pemex had $106.3 billion in financial obligations by September.
Pemex’s 6.95% bonds due 2060 rose less than a cent on the dollar to 58 cents at 11:32 am in New York, according to Trace data.
The draft budget will have to be voted on by the Senate by the end of the October.
–With assistance from Carolina Gonzalez.
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