Mexico's Carstens warns oil slump will last years

MEXICO CITY (Reuters) – Mexican Finance Minister Agustin Carstens urged lawmakers on Tuesday to approve new taxes to offset lower oil revenues, saying the country’s struggling energy industry would not recover quickly.

The government of President Felipe Calderon has proposed hiking income and consumption taxes in 2010 to offset lower revenues from crude exports as output from Mexico’s state-run oil industry is expected to remain weak.

“This fall (in oil production) is going to last for years … The future has caught up to us … we’ve been living as oil addicts,” Carstens said at a congressional hearing on the budget proposals.

Oil production has fallen by nearly one-quarter since peaking at 3.38 million barrels per day in 2004, far faster than state oil monopoly Pemex had expected.

Reuters