Major Mexican Refinery Has Been Shut For Weeks And The Media Only Just Found Out

  • Oct 13, 2021
  • Investing

One of Mexico’s largest oil refineries has been shuttered for weeks—only we are just now finding out about it.

Mexico’s Tula oil refinery has been closed since late September, Reuters sources close to operations reported on Tuesday, as teachers protesting delayed salary and pension payments went on strike and blocked roads that the refinery uses to transport the refinery’s product—including fuel for Mexico City—away from the facility.

Tula, located 90 kilometers from Mexico City, has a capacity of 315,000 bpd, and is Mexico’s second-largest refinery by capacity. But Tula (along with Mexico’s other refineries) produces only about half of that, on average.

The strike has caused inventories at the refinery to build up, and those inventories have now reached full capacity, the Reuters sources said.

Tula was one of the refineries earmarked by Pemex for an increase in production. Pemex said in May that it was set to invest $2.6 billion into the refinery to help decrease its reliance on foreign imports of fuel. The plan was supposed to be complete sometime in 2023.

Tula, along with several other Mexico refineries, are thought to produce significantly less than their nameplate capacity.

Ultimately, President Manuel Lopex Obrador’s plan is to stop all gasoline imports by 2024.

But analysts were skeptical that the amount of investment would accomplish its goal.

Work on the Tula refinery was set to resume in October as fresh capital became available, BN Americas reported in August.

Tula is ranked as the fourth most sulfur dioxide polluting refinery in the world.