The lower house finance committee passed a bill to lower the forecast price for a Mexican barrel of crude next year to $81 from a government proposal of $82 per barrel and down from $94 budgeted this year.
Lawmakers, mostly from the opposition conservative National Action Party (PAN), made reservations to the bill, but the committee agreed to let objections be discussed during a vote on the floor of the lower house that was set for Thursday.
International oil prices have slumped to a three-year low amid a glut of production and concerns about slowing global growth. Mexico, Latin America’s No. 2 economy, is a top crude exporter to the United States.
“Once we analyzed the international outlook … we thought it was prudent for the lower house to make a downward adjustment,” said Damian Zepeda, head of the lower house finance committee.
The bill, which covers the income side of the 2015 budget, raises the peso exchange rate forecast to 13.40 pesos per dollar from a 13.00 per dollar rate proposed by the Finance Ministry last month.
Mexico’s government relies on oil sales from state-run giant Pemex to fund about one third of its budget and a weaker exchange rate means the government can count on more pesos per dollar of crude exports.
Once approved by the lower house, the legislation will head to the Senate for final approval ahead of an Oct. 31 deadline. A spending bill must be approved by the lower house by Nov. 15.
The bill stuck to government forecasts for economic growth of 3.7 percent next year as well as a plan to trim the total public sector budget deficit to 4 percent of gross domestic product (GDP) next year from 4.2 percent this year.
Mexico is running its biggest deficit since 2009 this year as the government seeks to boost growth by greater spending on infrastructure projects.
Mexico’s economy is seen growing around 2.5 percent this year after expanding by a sluggish 1.4 percent in 2013.
The lower house modifications would project government income of 4.7 trillion pesos ($347.14 billion) next year compared to 4.68 trillion in the initial proposal. (1 US dollar = 13.5392 Mexican peso) (Reporting by Noe Torres; Writing by Michael O’Boyle; Editing by Bernard Orr)