Gasoline price in Mexico falls less than in the United States

The price of regular gasoline, which is used by 85% of private motorists in Mexico, reached 21.79 pesos per liter in November, with a monthly reduction of 0.46%, after the previous month it rose again after reductions and reaching its historical peak in August.

However, the average price reported in the penultimate month of the year by distributors to the Energy Regulatory Commission (CRE) fell 33 times less than the reference price for the US Gulf Coast, which fell 13.4% in one month to 2.45 dollars per gallon, due to the difference between the national price policy and the free market of the neighboring country to the north.

This distinction has an impact because the Special Tax on Production and Services (IEPS) imposed by the Ministry of Finance on national gasoline positively affects users when global prices rise, but affects when they fall.

For example, in one year, the price of regular gasoline increased by 8.62%, while in comparison with the US spot price the reduction was less, 7.7 percent.

In the case of Magna gasoline, with a higher octane rating in Mexico, the national average price for November was 24.13 pesos per liter, with a monthly reduction of just 0.04% because as soon as international prices fall, the IEPS is eliminated on this gasoline.

In annual terms, the price of Magna gasoline increased 8.3%, in contrast to the international reference that rose 7.7% on average reported by the US government’s Energy Information Administration.

In the case of diesel, for which the highest IEPS is decreed in the country since it is used for the transport of merchandise, the price in November was 23.73 pesos per liter, with which, when the IEPS was imposed again, it even increased 0.3 % compared to the price of 23.70 pesos per liter in October.

In the annual comparison, the price of diesel increased 9.7%, two percentage points more than the increase that the US reference had on average.

It should be remembered that for this week, consumers of Magna gasoline will pay 4.1 pesos of IEPS for each liter purchased; while the fiscal stimulus quota will be 1.3 pesos per liter, according to what is published in the Official Gazette of the Federation (DOF).

The Ministry of Finance reported that the fiscal stimulus on the IEPS for Magna gasoline will be 24.49% for the week of December 17 to Friday, December 23.

The fiscal stimulus on the IEPS for Magna gasoline accumulates seven weeks downward since the 100% rate was authorized, which was in force between the week of October 29 to November 4.

Likewise, the data revealed last Friday is the lowest stimulus rate so far this year.

karol.garcia@eleconomista.mx