Calderon proposes Pemex autonomy

Mexican President Felipe Calderon is proposing to Congress giving autonomy to state oil monopoly Pemex to free the company from federal budget restrictions and give the government more money to spend next year.

The proposal was one of a number of measures that Calderon said the government is seeking to counter the negative effects on the economy of the global financial crisis. The plan comes as the government and Congress consider the impact lower growth will have on next year's budget. Calderon said effects such as lower growth and lower oil prices are likely to shave 28 billion pesos (US$2.34 billion) off next year's expected revenue, said a Dow Jones Newsiwire report. But rather than curb spending, Calderon said the government will seek to promote growth through investment in infrastructure. "Instead of being obliged to cut public spending, we can propose measures to stimulate investment and mitigate the negative impact of the international financial turbulence," he said in an address at the presidential residence. Among proposals for Pemex is the construction, beginning at once, of a new oil refinery using 12 billion pesos in funds in a Pemex stabilization fund. If the Congress approves autonomy for Pemex, and the state company is removed from the federal budget, it will be able to obtain its own financing without pushing the federal budget into deficit, Calderon said. That would give the federal government an additional 78 billion pesos to spend next year.
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