Pemex: oil price and financial management in the context of elevated fiscal burden

Purpose The article analyzes how oil price fluctuations are reflected in the management of Petróleos Mexicanos (Pemex) based on its balance sheet (BS) and particularly affect Pemex's corporate income. Design/methodology/approach author uses a vector auto-regressive (VAR) model with seven variables for period 1977–2019. first variable is others belong to BS: total income, sales revenue, operating costs, investment, payment taxes, duties contributions (TDC) interest debt. Findings results show that an environment elevated fiscal burden excessive tax by Pemex state, increases positively affected income obtained from sales, but surplus used primarily finance expenses coming TDC, which associated production commercialization hydrocarbons; physical financial investment disconnected evolution price. Under scheme extracts, average, 98.46% not priority. Practical implications findings research have important Mexico's energy policy because affecting long-term productive sustainability Pemex. Originality/value First, study contributes literature prices Mexico analyzing perspective, area there few rigorous studies. Second, providing quantitative support relationship between BS through VAR model.