Analysis of public investment in infrastructure in Mexico: Dos Bocas Refinery case

Abstract

Problematic: For the Mexican economy, the energy sector is a strategic sector, which in the last 20 years has presented problems of inefficiency in productivity, which has generated an increase in fuel imports. In addition to this, the COVID-19 crisis and the armed conflict in Russia and Ukraine have pushed up the value of hydrocarbons and their derivatives on the international market. Objective: Analyze the specific case of public investment in infrastructure in the energy sector with the construction of the new Dos Bocas refinery. Materials and methods: to calculate the effect of investment in infrastructure of the Dos Bocas Olmec Refinery, the multiple linear regression model (MLRM) is used; In addition, the double logarithm model is generated to measure the elasticity of public investment in economic growth. Results: there is a direct correspondence between investment in governmental physical infrastructure in the energy sector and the value of gasoline in Mexico. The liberalization of the values of gasoline and diesel in our country has generated a dependency of the values of fuels with the international market. Discussion: public investment shows a positive correspondence with economic growth, but this is not always true, since in emerging economies great care must be taken with the amount of public investment executed by the government, giving the probability that the benefits of this are offset is high, because the increase in taxes or internal and external debt payments generate negative effects on the economy. Conclusions: the policy of construction of the refinery will achieve better conditions in the production of gasoline in the national market, thus reducing the import of fuels and stimulating the production of hydrocarbons by the parastatal company PEMEX. Contribution / originality: effect of the investment in infrastructure of the Dos Bocas Olmec Refinery in Mexico.