The Treasury Cuts Tax Incentives for Diesel, Magma and Premium.

The federal government through the Ministry of Finance and Public Credit (SHCP) has announced that there will be a reduction in tax incentives for Magma and premium gasoline, in addition to an increase in the tax incentive for diesel, however, motorists will be required to pay Special Tax on Production and Services (IEPS).

Fiscal stimulus measures would work as follows: US$ 0.14 cents for Magma gasoline, US$ 0.09 cents for premium gasoline, and a US$ 0.32-cent increase for diesel.

Meanwhile, the IEPS rates will be as follows: US$0.24 cents for Magma gasoline, US$0.24 cents for premium gasoline, and US$0.10 cents for diesel.These changes have occurred because oil prices have risen on a monthly basis, and international prices have seen an increase in monthly gains as the conflict between the United States and Iran unfolds, in addition to the volatility that the closure of the Strait of Hormuz has caused in the crude oil market.

In light of this fluctuation in international oil prices, the government has had to increase the tax incentives for gasoline and diesel.Mexico's Ministry of Finance announced this change in the tax incentives it has been forced to impose on fuel, which have resulted in a fiscal cost of approximately US$2 million.

On the other hand, the Ministry of Finance has also explained that the net fiscal impact of the stimulus measures is, for now, neutral, as it has been offset by the higher revenues Pemex has generated from crude oil sales amid high oil prices.