Last year, when Mexico faced the highest inflation levels in almost 20 years, the federal government began to apply heavy subsidies to gasoline via IEPS discounts with the aim of containing price rises.
With this subsidy, the federal government stopped collecting 397.298 million pesos in 2022, according to data from the Ministry of Finance, but the price of gasoline was prevented from reaching 40 pesos per liter, said Alejandro Montufar, general director of PetroIntelligence.
Last year, while in Mexico the price of gasoline remained below 23 pesos per liter, in the United States it was around 27 pesos, according to information from PetroIntelligence.
“The subsidy meant that the price of gasoline in Mexico did not rise so much. When the rest of the world began to reduce (the price of gasoline) due to the drop in the price of oil, that was not the case in Mexico,” he said. Ana Azuara, economic analysis manager at Grupo Financiero Base.
Between January and May of this year, due to the reduction of the IEPS subsidy and the import of gasoline and diesel, the government has collected 62,047 million pesos, when in the same period last year it received 9,428 million.
The amounts of oil imports also decreased, totaling 24.287 million dollars, when between January and May 2022 the figure was 27.742 million, according to figures from the Bank of Mexico (Banxico).
Will the price of gasoline go down?
This year the price of gasoline and diesel has remained unchanged despite the fact that the price of oil has fallen and the peso has gained ground against the dollar, due to the decrease in the IEPS subsidy.
For example, on July 14, the Ministry of Finance reported that the fiscal stimulus for a liter of Magna gasoline is 1.46 pesos, 0.08 cents for Premium and 50 cents for diesel.
In the first quarter of this year, the IEPS per liter of Magna was 5.9195 pesos, for the Premium 4.9987 pesos and 6.5055 pesos per liter of diesel, according to data from the Center for Economic and Budgetary Research (CIEP).
“What has to happen is for the government to recover the resources it lost. That is explaining why the price has not gone down,” said Alejandro Montufar.
There are signs of volatility in the market, which does not allow us to speak of a downward trend in the price of gasoline, added the PetroIntelligence executive.
“The price is going to go down because there is an expectation of a global economic crisis. In the United States, the price of gasoline fell as of December 2022, due to the entire economic issue -bank bankruptcies in the US, inflation in Germany, crisis in China-; the price falls because there is fear of a very strong recession”, said Montufar.
