Regular gasoline in Mexico could have reached 29 pesos per liter without incentives

The price of regular gasoline in Mexico could have reached 28.83 pesos per liter nationwide during the penultimate week of June, had it not been for the complementary stimulus granted by the federal government.

From June 18 to 24, the complementary stimulus amounted to 7.02 pesos for each liter of regular or Magna gasoline, its highest level in the year.

With this, the consumer only paid an average of 21.81 pesos for each liter of Magna gasoline, according to data from Pemex and the Energy Regulatory Commission (CRE).

At that time, the international price of oil -the main component of the price of gasoline- traded above 120 dollars per barrel.

Days after the conflict between Russia and Ukraine began, when oil rebounded, the federal government stopped charging 100% of the IEPS to gasoline and also gave a complementary stimulus (a subsidy) to control the increase in the price of fuel .

The complementary stimulus was applied for 21 weeks until mid-August last year, once international oil prices had fallen from their mid-year highs.

In addition, as of that month, the 100% subsidy to the gasoline IEPS was also reduced.

“You are buying gasoline more expensive, but you cannot sell it at the price because inflation would skyrocket,” which is why the stimuli and subsidies were applied, said Ramsés Pech, an energy and economy adviser.

During the 21 weeks in which the complementary stimulus was in force, an average of 3.33 pesos was subsidized for each liter of regular gasoline. In that same period, the price for the final consumer was 21.64 pesos per liter.

Therefore, without the complementary stimulus, the price of fuel would have been on average almost 25 pesos per liter between March and August.

Premium in 30 pesos

For its part, the price of premium gasoline would have skyrocketed above 30 pesos per liter in June if the subsidy had not been granted by the federal government.

In the week of June 18 to 24, premium gasoline should have cost final consumers 31.81 pesos per liter.

However, thanks to a stimulus of 7.99 pesos, consumers only paid 23.82 pesos per liter.

Thanks to the complementary stimulus, the price of gasoline in Mexico did not skyrocket during June as it did in the United States

It was not until August that the price of regular gasoline reached its maximum in the year (21.93 pesos), while the premium reached it until October (24.14 pesos).

sebastian.diaz@eleconomista.mx