Mexico's government has made good on earlier assurances that it would provide further financial support to struggling state oil company Pemex (EIF Mar.2'16). However, the package announced by the finance ministry last week is modest and will provide only short-term relief as Pemex faces the herculean task of trying to put its house in order — both operationally and fiscally — amid a devastating slump in oil prices. Of course, the company's problems — declining production, peerless inefficiency and its status as the nation's cash cow — predate the price crunch. But by making a bad situation worse, the protracted period of low prices has raised the prospect that Pemex will become a growing financial burden for the government, rather than a source of easy money.
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