Mexican Diesel Prices to Rise on Russian Export Ban

Mexico’s retail dieses prices could rise in October, following Russia’s temporary ban on diesel and gasoline exports, as the country imports around 65% of its diesel needs according to Argusmedia.

• A tighter global diesel market, following Russia’s export ban on diesel and gasoline from 21 September onwards, could support Mexican retail prices.
• From January to July Mexican diesel production averaged 137,000 b/d, around 35% of its demand. Imports amounted to about 256,000 b/d during that period — mainly from the US — a 5% increase from a year earlier, energy ministry data showed.
• A key competitor with Mexico for US diesel will likely be Brazil, which became a significant buyer of Russian diesel since the EU banned most Russian oil and refined products imports last year.
• Diesel retail prices in Mexico reached their highest point this year, averaging Ps24.11/l ($5.20/USG) so far in September, according to prices reported by fuel retailers to the energy regulatory commission (CRE) and tracked by Argus.
• Such a hike was driven in part by a rise on delivered diesel prices to Mexico's east, which reached their highest all year at $3.15/USG on average so far in September, according to Argus assessments.
• "We have started to see a hike in diesel prices already," one retail fuel station owner told Argus recently.
• US diesel inventories through the first three weeks of September were at the second-lowest average level for that stretch in 22 years, at 120.3mn bl because of trimmed imports and recent gains in domestic demand, EIA data showed.