The importance of oil in Mexico is, essentially, economic. The inflow of foreign currency for its sale, as well as the large percentage that it represents in the State's income, make it a fundamental economic sector for the economic vitality of the country.
In addition, it should be noted that this material is essential for the entire production chain and daily life to continue.
Not only in Mexico, but throughout the world, oil is the main source of energy today, so the fact that a country has reserves gives it important competitive advantages.
Reasons for the importance of oil in Mexico
You cannot talk about oil in Mexico without talking about PEMEX, the company that has monopolized the extraction and marketing of this product for decades.
It was created by President Lázaro Cárdenas in 1938. This state-owned company is the most important in the entire country due to its income and what it contributes to the state coffers.
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Despite the drop in oil prices on a world scale in recent months, the percentage of income that Mexico obtains from this industry continues to be very important for the national economy.
In 2013, the oil obtained represented 34% of the total income obtained by the country. Four years later, it has dropped to 14.9%.
This shows the importance of seeking alternative resources to complete the State accounts, as other exporting countries are doing.
On the other hand, this sector provides a great source of foreign exchange; the money that comes from abroad, behind the sale of agri-food products.
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One of the great advantages that oil brings to Mexico is the use of the money it generates to carry out infrastructure improvements or to start up social services.
The so-called Mexican Petroleum Fund is the body in charge of obtaining the best profitability and allocating the income for these purposes.
In this way, this fund has been used to pay for large works or for innovation projects. Likewise, complete the budget for educational scholarships. Finally, 40% is saved to create a remaining savings.
The proof of this importance is seen in the cancellation of projects such as the transpeninsular train between Yucatan and Quintana Roo due to the reduction in oil prices.
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The fact that about 88% of the energy consumed in Mexico comes from oil gives an idea of how important it is to have reserves.
The no need to import such a quantity of hydrocarbons supposes a great budgetary saving that can be dedicated to other matters.
Prices for products such as gasoline have so far benefited from government-regulated prices, making them more affordable. However, the situation changes at the end of 2017, when the market is liberalized.
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Traditionally, the oil industry has been one of those that has offered a good job opportunity in Mexico. Only the PEMEX company has 130,803 workers on its payroll, although the number is expected to decrease in the coming years.
Likewise, it has been one of the companies that has offered the best salaries and conditions, within a labor market with a large number of unemployed.
Now, with the entry of private oil companies, it is thought that the opportunities for engineers and other specialized workers may increase
Oil doesn't just offer direct jobs. Other sectors, such as transportation or processing plants, also benefit from the presence of this hydrocarbon.
References
- Mexican Petroleum Fund. What is the Mexican Petroleum Fund for Stabilization and Development ?. Obtained from fmped.org.mx
- Núñez Alvarez, Luis. The importance of oil. Obtained from economia.com.mx
- Export Gov. Mexico - Oil and Gas. Retrieved from export.gov
- Delgado Martínez, Irma. The Social Importance of Oil. Recovered from magazinescisan.unam.mx
- Woody, Christopher. Mexico's struggling oil sector is in 'the eye of the hurricane. (January 15, 2016). Retrieved from businessinsider.com