Mexico Gets Ready to Rely Less on Oil: Finance Ministry Projects Oil Revenue Will Fall Below One Trillion Pesos in 2027

The expected drop in prices and exports would shrink oil’s role in public finances, while taxes gain ground as the main revenue anchor.

Federal government revenue from crude production and exports could fall below the one-trillion-peso-a-year mark in 2027—a threshold that in recent years has served as a benchmark for the oil sector’s weight in public finances. According to projections from the Ministry of Finance and Public Credit (SHCP) laid out in its preliminary guidelines, oil-related revenue would come in around 910.868 billion pesos in 2027, a meaningful decline compared with what was approved for 2026.

The expected adjustment comes as oil rents no longer play the role they did in past decades: the export platform has shrunk, the country remains highly dependent on imported fuels (especially gasoline), and it also relies heavily on natural gas for power generation and industry. In that context, oil remains an important component of the budget, but with less ability to offset external shocks or finance spending expansions.

Finance officials estimate the main driver of the decline would be a lower average price for Mexico’s oil blend in 2027, projecting a level substantially below 2026. The lower-price assumption is paired with expectations of lower export volumes, even if total production shows a marginal increase. Put simply: even if a bit more is extracted, less would be sold abroad and at a lower average price, reducing the associated net revenue.

At the same time, the SHCP does not expect the exchange rate to make up for the lower crude price. The official projection assumes a slightly weaker peso, but not enough movement to counter the oil shortfall. Because the budget is denominated in pesos, depreciation can increase the peso conversion of oil revenues priced in U.S. dollars, but that FX “cushion” tends to fade when the shock is driven by price and volume—and especially when the country also pays for a significant share of its energy imports in foreign currency.

From Oil to Taxes: The Structural Shift in Public Revenue

The clearest sign of the shift is the changing composition of public-sector revenue. Finance Ministry estimates suggest tax revenue will continue to increase its share of the total, while oil revenue keeps losing relative weight. This change reflects a medium-term trend: collections have been strengthened through tighter enforcement, digitization, compliance monitoring, and anti-evasion measures, and economic performance—despite periods of slowdown—directly affects VAT, income tax, and consumption levies.

In 2027, the SHCP expects the lower oil windfall to be offset by higher tax collections, supported both by economic momentum and the cumulative effects of its revenue-efficiency strategy. For public finances, the implicit message is that the revenue “anchor” increasingly depends on domestic activity and tax compliance, not the commodities cycle. In practice, this can provide more stable revenue, but it also makes the budget more sensitive to formality, investment, and employment, as well as to the government’s ability to sustain the tax base without undermining productive incentives.

The reduction in oil revenue would also be accompanied by adjustments to net spending, with a decrease relative to what was previously approved. This matters because the fiscal balance depends not only on how much is collected, but also on how priorities are reallocated amid spending pressures: pensions, debt-service costs, social transfers, and investment needs in infrastructure and energy.

Looking ahead, a scenario of lower dependence on oil opens two interpretations. On the one hand, it reduces the budget’s vulnerability to international price shocks; on the other, it requires maintaining a revenue path consistent with growth and spending needs—particularly in a period when public and private investment face the challenge of raising productivity and domestic value-added, amid regional trade integration and the reshoring of supply chains.

Overall, the projections suggest 2027 could mark an inflection point: oil would remain relevant, but no longer as the “trillion-peso” engine that in several recent years boosted government coffers. The key will be whether tax collections and spending control can absorb the transition without compromising investment or the provision of public services.

From a neutral standpoint, the projected pullback in oil rents reinforces the idea that Mexico is moving toward a fiscal structure more reliant on taxes and less on hydrocarbons, with direct implications for budget discipline and economic policy priorities.