Mexico City.- If the Government of the virtual president-elect Claudia Sheinbaum seeks to continue with the energy policy of the current Administration, it will have to disburse 2 trillion 195 billion pesos, stated the Center for Economic and Budgetary Research (CIEP).
This amount is equivalent to the oil company’s financial debt and its debts to suppliers, which at the end of March totaled 2 billion pesos.
According to the document “Energy Policy: Fiscal Challenges 2024-2030”, the organization indicated that the next federal Administration will face fiscal challenges in the implementation of its energy policy and will inherit high costs from the State Productive Enterprises (EPE).
He said that during the outgoing government (2018-2024), one trillion 867 billion pesos were spent as a result of both the reduction of the Shared Utility Right (DUC) and the patrimonial support to Pemex.
“During her campaign, the president-elect proposed continuing to strengthen the SOEs, as well as the transmission network, and maintaining subsidies for residential electricity rates,” the document stated.
He recalled that, in accordance with the project of the next Government “100 steps for the Transformation 2024-2030”, on energy sovereignty for sustainable development by Claudia Sheinbaum, the energy policy will have the tasks of guaranteeing the correct functioning of the energy sector and building solid foundations to redirect the sector towards a sustainable future.
In light of this, CIEP stressed that the continuity of the energy policy, together with the implementation of the new proposals, represents a challenge for the country’s public finances. Specifically, the strengthening of Pemex has implied a cost that has allowed it to cover its debt maturities.
“However, this strategy has not been accompanied by an operational and financial restructuring that would strengthen it. If this continues, it could put pressure on the state of public finances,” he stressed.
He explained that the next administration will face Pemex debt maturities that represent 38.5 percent of its total debt. Given this, and assuming that its support with equity contributions and a reduction in the DUC rate is maintained, this could imply a cost of 1 trillion 371 thousand million pesos: 921 thousand 736 million for equity contributions and 449 thousand 960 million pesos for charging a DUC rate of 40 percent.
On the other hand, he indicated that in order for CFE to maintain its 54 percent share in electricity generation, it will be strengthened with investments in new projects for 245,680 million pesos, which will add up to 13,660 MW.
He added that investments of 55,412 million pesos and 5,259 million pesos, respectively, are planned for strengthening the transmission and distribution services provided by the CFE.
He noted that investments related to transmission include 44 projects covering a length of 3,850 km of circuits, which would represent a growth of 3.5 percent compared to the current network. For its part, investments in distribution will involve 41 projects.
In addition, electricity rate subsidies are intended to support the end user. If this support is maintained as has been observed in recent years, this item would represent an expenditure by the federal government of 517 billion pesos.
“In view of this, the cost of continuing these three policies during the Six-Year Period would total 2.195 trillion pesos. That is, 1 percent of GDP would have to be allocated each year. To this must be added the unavoidable expenses of the sector, such as operating expenses, infrastructure maintenance, financial and pension expenses,” said the CIEP.
He stressed that the energy policy of the next Administration will face the challenge of resuming the path towards an energy transition with fiscal sustainability.
“The start of this process will be complex, since a fiscal adjustment of 3 percent of GDP is anticipated for 2025, through the RFSP, justified mainly by a decrease in investment in infrastructure. However, achieving the objectives proposed by the new administration will require greater public resources,” he concluded.
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