Mexican April retail gasoline sales fell by 60pc

Onexpo did not provide outright volumes for April, but its report indicates that declines accelerated rapidly in late April, with only about 319,000 b/d of regular gasoline currently being sold on average nationwide.

Gasoline sales in the week ended 10 April — the latest energy ministry (Sener) data available — fell by 32pc to 538,000 b/d from 797,000 b/d in the week ended 20 March — close to average levels earlier in the year. The government initiated stay-at-home measures to counter the coronavirus one day later, on 21 March. Diesel demand fell by 20pc in the week ended 10 April to 305,000 b/d from 380,000 b/d according to Sener.

The plummet in sales complicates retailer economics as 70-80pc of the costs of a station are fixed, Grupo Arco's chief of operations Jose Pedraza said. There are about 105 Arco-branded stations in Mexico.

Most retailers have only seven-day credit lines for fuel purchases, but their tanks are now still mostly full by the time the bills are due.

"We are at a point in which we have to pay for what we have not sold," Pedraza said.

Even complying with regulations is more complex today, he said. Government consumer watchdog Profeco recently inspected an Arco station where a crew was performing mandatory environmental clean-up of the tanks.

"When Profeco arrived they told us to stop the cleaning as that activity was not considered as essential," he said. "But how can we keep up our [essential] activity if our providers are not essential?"

Inspectors later allowed the clean-up to continue.

Retailers in some regions face even greater trouble.

In Sinaloa, on Mexico's northwest coast, regular gasoline sales volumes dropped by 70pc, while higher-octane premium gasoline sales fell by 80pc and diesel sales by 50pc in April compared with pre-Covid-19 levels, said Ana Maria Cabanillas, president of the regional retail fuel owners' association of Sinaloa.

Demand has fallen even more in the biggest cities, she said.

Grupo Arco's sales also fell by 70pc, in line with the demand declines in Sinaloa. The brand is part of Marathon Petroleum and operates in the northwest — Sinaloa, Baja California, Baja California Sur, Chihuahua and Sonora, Arco's Pedraza said.

In Puebla, a key point in Mexico's fuel logistics chain that unites the Gulf coast with Mexico City, the daily average of regular gasoline sales from 20 April-6 May fell by 50pc, while premium gasoline sales fell by 64pc and 34pc for diesel, said Francisco Zorrilla, president of Onexpo Puebla.

Oaxaca saw its regular gasoline demand drop by 50pc in April versus pre-coronavirus levels, said Jose Luis Ballesteros, president of the retail fuel station owners' association of Oaxaca.

By Sergio Meana