Mexico President Andrés Manuel López Obrador’s pledge to subsidize gasoline prices could partially negate the windfall of high oil prices for state oil company Petróleos Mexicanos (Pemex), according to new analysis by Fitch Ratings Inc. 

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Pemex “will benefit from higher oil prices although these pose risks to federal government revenue, since the government has committed to prevent gasoline prices from increasing above the rate of inflation,” Fitch analysts said Wednesday. President López Obrador, commonly known by his initials AMLO, has said the government will use “excess” revenue generated by current high prices to offset the cost of the fuel subsidies. 

The Fitch team expects Pemex to generate positive free cash flow (FCF) of $10 billion this year assuming a...