Mexico will grant a tax cut worth $2.6 billion to state-controlled Petróleos Mexicanos SA de CV in order to cope with the impacts of the coronavirus pandemic and the collapse of the international oil price, President Andrés Manuel López Obrador said.

The move, announced April 5, is part of a broader set of measures announced by the president to boost the economy during the crisis. The president reiterated that Pemex, a monopoly until a reform opened the sector in 2013, will remain a priority, and he said he will present a long-awaited package of public-private investments for the energy sector later in the week worth $13.5 billion.

The investment package, which has been expected by the industry since the beginning of the year, is seen as essential to increase crude production and meet the government's ambitious goal of pumping 2 million barrels per day of oil by the end of the year, from roughly 1.7 million bbl/d currently.

U.S. oil producers are running out of places to keep a surplus of their commodity in a low-demand market.

For 2020, Pemex's tax burden will be 54% of its profits, down from the originally planned 58%, according to a presentation by the finance ministry of Mexico released April 3. Oil revenues accounted to roughly 17% of all government revenues during 2019. Pemex had an outstanding financial debt of over $100 billion at the end of 2019.

Sheky Espejo is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.