Mexico's Oil Production Collapse Leaves $23 Billion Budget Hole - Higher Taxes Coming

[hatrack]

The Mexican government said Tuesday its 2010 budget will include new taxes to compensate for a decline in oil revenues that is expected to leave a $23 billion hole in the public finances. "The future caught up with us. We have always had in mind the possibility that oil revenues were going to become exhausted, and now we are facing a very clear manifestation in that regard," Finance Secretary Agustin Carstens told lawmakers in a briefing on the draft budget President Felipe Calderon must present by Sept. 8.

Mexico, one of the world's leading oil exporters and a key supplier to the United States, is expected to see its production of crude drop by roughly 800,000 barrels per day in 2010.

Since oil revenue accounts for 40 percent of the Mexican government's income, the decline in output is projected to cost the treasury some 300 billion pesos ($23.07 billion).

Oil production has already slumped more than 23 percent since 2006, Mexico's finance department says, and officials expect Mexican crude to sell for an average of $53.80 a barrel in 2010, down from $66.92 currently.

EDIT

http://www.oilonline.com/news/digest/single-news-article/?tx_ttnews=76989&cHash=dc0b65fca3

[itsrobert]

1. This is why Palin quit

The news is going to be bad for Alaska. And it was mainly her fault for spending their surplus as bribes to the voters.

[4dsc]

2. Even a bigger consequence for the USA..

SO where are we going to get the oil to replace Mexico's falling production??

[hatrack]

3. Not here - that much is a given

"Drill baby, drill!" my ass.

[GliderGuider]

4. Um...

"Drill baby, drill!" my ass."

Rather unfortunate choice of phraseology, old chap...

[hatrack]

5. Hah!

Post in haste, repent at leisure . . .

:toast: