Mexico’s 2023 budget will assume a crude oil export price of between $65-$70 per barrel as global oil prices continue to subside from the highs seen earlier this year, Deputy Finance Minister Gabriel Yorio said on Monday.

The forecast is well below the $93.6 per barrel forecasted for the end of this year. Mexico’s state-owned oil company Pemex reported the average price of a crude oil barrel stood at $105.34 in the second quarter.

The higher end of the range given by the deputy minister is just above the $68.7 per barrel set in the government’s draft budget for 2023.

Crude exports, which currently average 1.7 million barrels per day (bpd), make a signficant contribution to government revenues, and are a key variable in the budget approved by Congress every year.

During a meeting with lawmakers broadcasted online, Yorio also noted that government subsidies to control fuel inflation will cost 392 billion pesos ($19.67 billion) this year.

The demand for gasoline and oil will be lower next year amid a potential slowdown of the economy, Yorio said.

The crude price forecast in the budget is key to the hedging program the government conducts each year to shield its revenues from fluctuations in world markets.
Source: Reuters (Reporting by Adriana Barrera and Valentine Hilaire; Editing by Simon Cameron-Moore)