The Mexican government found a good solution to continue containing the rise in the price of gasoline and avoid harming consumers.
It is the point of view of the most important gas station association in Mexico, the National Organization of Petroleum Retailers (Onexpo), headed by Roberto Díaz de León.
However, it also invites caution.
We will have to be aware of the evolution of its application and several basic indicators: inflation, exchange rate and reference price.
And at the same time, the Mexican government will have to carefully observe the trade balance, specifically the balance between oil exports and gasoline imports.
But in general terms, the announcement goes in the right direction, they say. Last Friday, the Secretary of the Treasury, Rogelio Ramírez de la O. announced an additional stimulus for gasoline and diesel to prevent the price of this energy from increasing in real terms.
The one that had been applied was already insufficient. Its coverage reached 100% for regular gasoline and diesel and 97% for premium gasoline.
By virtue of this mechanism, until now, the real price of gasoline for the local market has been kept artificially low, at a level of around 21.16 pesos per liter. Without the IEPS incentives applied by the Ministry of Finance, it would be around 27 pesos per liter for the final consumer.
And Onexpo’s projections are that it will soon reach a real price of 30 pesos per liter.
The recent increases in reference prices that took a barrel of WTI to 139.13 dollars and the Mexican export mix to 115 dollars per barrel were reflected in increases of 40% for regular and premium gasoline and 56% for diesel.
From January 1 to March 7, 2022, the price of regular gasoline went from 20.55 to 21.16 pesos per liter, which has had an increase of 61 cents per liter, equivalent to 2.9% so far this year.
For this reason, the additional stimulus to the IEPS of gasoline and diesel, say the gas stations, will allow maintaining the original objective, to contain the price of gasoline.
Although the additional stimulus will be neutral for the gasoline vending companies themselves.
It will be applied at a higher level of the fuel supply chain. Pemex producers and gasoline importers will receive it.
Gasoline vendors will not have the direct benefit of IEPS accreditation against Income Tax and Value Added Tax.
Exactly as was happening with the first part of the stimuli, the impact of the rise in international prices is softened in the local market through the Pemex producing companies and the importers.
However, the country’s gas stations, says Díaz de León, will continue with their policy of self-containment of profit margins.
Onexpo is confident that with the new fiscal stimulus it will be possible to keep gasoline and diesel prices below inflation.
The head of public finances said last Friday that income and expenses from the sale of oil and the purchase of gasoline are practically a mirror. They offset each other.
They are a natural cover, he assured.
What is not known is what will happen in an extreme and prolonged scenario. On the other hand, the intention to avoid the inflationary impact due to the rise in the price of gasoline in Mexico is being fulfilled with the fiscal sacrifice that implies stopping charging the IPES for gasoline and as needed, with injections of resources made by the government to cover ISR and VAT for producers and importers. Such fiscal resources could be used to meet other social needs. Instead it is intended for a generalized benefit, not a targeted one.
No one knows when the war will end, and the economic fallout from the trade war is already threatening the world with winds of stagnation and inflation.
Journalist
Rich and Powerful
He has worked continuously in newspapers, magazines, radio, television and the Internet, in the last 31 years he has specialized in business, finance and economics. He is one of the three hosts of the program Alebrijes, Águila o Sol, a program specialized in economic issues that is broadcast on Foro TV.