Mexico Says It May Need Help Because of Oil Skid

President Miguel de la Madrid says Mexico may need help from the international financial community in handling its huge foreign debt of $96.4 billion because of the sharp decrease in oil prices.

In a series of speeches in Queretaro, 135 miles northwest of the capital, marking Constitution Day, De la Madrid said the decline in oil earnings “worries all us Mexicans.” He made the speeches Wednesday, and the texts were released today.

Mexico depends on oil sales for about 70% of its foreign earnings, which are used to buy needed imports and repay its foreign debts, the second highest in the developing world after Brazil. About $27 billion of the loans are held by U.S. banks.

“We Mexicans must make extraordinary efforts, still greater than what we have done until now in the face of the difficulties that the international economy presents us, principally in the fall in prices of raw materials, and especially of petroleum,” De la Madrid said.

Great Effort Required

“It will require a greater effort of all. It will require, of course, approaches negotiated with the international economic community,” he said.

Chief debt negotiator Angel Gurria met in New York with representatives of the nation’s creditor banks Tuesday. Banking industry sources said Mexico might need $9 billion in outside financial aid this year--nearly as much as it pays annually in interest on its current debt.

Mexican officials had expected to seek $4.8 billion this year from international bankers and financial organizations.

Treasury Department spokesman Roberto Contreras refused to comment on Gurria’s New York meeting. He said De la Madrid was meeting today with his economic advisers to analyze the situation.

De la Madrid’s government has come under growing pressure, from closely aligned labor unions as well as from opposition political parties, to call a debt moratorium.

The banking industry sources, who spoke on condition of anonymity, said the discussions with Gurria were preliminary and more meetings were needed before any decision could be made.

If Mexico required as much as $9 billion, it could seek help from not only foreign bankers but also international organizations such as the World Bank and the Inter-American Development Bank.

It also could try to make up some of the shortfall by slashing imports and dipping into its already limited foreign reserves.

Strategy Shattered

As part of new negotiations, Mexican finance officials may well try to get better terms, such as lower interest rates. Last August, they signed a $48.7-billion rescheduling package that stretched some debt payments over 14 years.

Analysts say when Mexico drew up financial plans for 1986 late last year, it assumed oil prices would average $22.50 this year.

But last Friday, responding to the cost-cutting of its competitors, Mexico trimmed its prices by about $4 a barrel to an average of $19.75, retroactive to Jan. 1. The average price was $23.75 in December.