Hacienda subsidies gasoline due to rising oil prices

According to a publication in the Official Gazette of the Federation (DOF), Premium gasoline will receive a tax incentive of 8.23%, equivalent to US$0.027 per liter; therefore, the Special Tax on Production and Services (IEPS) rate that consumers will pay will be US$0.30 per liter.

Magna gasoline will also receive greater support: the Ministry of Finance and Public Credit (SHCP) set a tax incentive of 22.20% for this fuel, equivalent to $0.085 per liter. Thus, the IEPS rate charged to consumers will be $0.30 per liter.

In the case of diesel, the tax subsidy increased more sharply. For the second half of July, the subsidy will be 50.64%, equivalent to US$0.21 per liter, meaning the reduced IEPS rate will be US$0.21 per liter.

This change comes at a time when international prices for oil and its derivatives are not immediately passed on to consumers. The final price of gasoline also depends on the IEPS, the exchange rate, and the costs of refining, transportation, storage, and distribution, in addition to the fact that Mexico imports a significant portion of the fuel it consumes.