Mexican Congress lowers Pemex tax rate

Mexico’s lower house of Congress has approved changes in tax rules for state oil monopoly Petroleos Mexicanos, or Pemex, that will leave the company with more money for exploration and production.

Presidential spokesman Ruben Aguilar said June 29 that Pemex and the Energy Ministry will analyze the changes to gauge the effects on the oil company and public finances, but that “in principle” the executive branch hasn’t thought about vetoing it.

The lower house voted 330-131 on June 28 in favor of the bill, which had already been approved by the Senate.

The changes will give Pemex a lower tax rate on oil and gas production from new projects, where investments raise the cost of production compared with costs at established operations.

The high rate of taxation on Pemex, which pays 61 percent of its sales to the federal government, has left the state company with net losses in recent years despite record high crude oil prices.

Pemex’s budgets are included in the federal budget.

The new tax rules would give Pemex sufficient incentive to invest in exploration of new deposits and to step up production, Congress said in a press release.

The new tax treatment has been estimated to save Pemex between $2 billion and $3 billion in 2006 and as much as $13 billion over four years.

—The Associated Press