Published on Thursday, January 13, 2022

Mexico | Producing all the gasoline that the country consumes is not efficient

Last month the government announced the intention to stop exporting oil as of 2023 to instead use it in the national refining of gasoline with the aim of achieving "energy autonomy" and stop importing gasoline.

Key points

  • Key points:
  • It is argued that, being an oil producer, Mexico should not import any oil derivative.
  • There is neither in economic theory nor in empirical evidence any element that suggests that producing an input implies some type of comparative advantage to produce the final product.
  • Oil extraction and refining are different economic activities. Being efficient in one does not necessarily imply being efficient in the other.
  • Mexico is relatively efficient in extraction, but very inefficient in the production of gasoline.

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