With the rising wave of oil prices in the world and the decisions in Mexico to avoid the increase in the price of gasoline, many questions have arisen and also many answers.
What is better?: That the government maintains an artificial price in the price of gasoline for consumers? Is it implicitly containing inflation? Will the scheme to “soften” gasoline prices become a problem for public finances? How much will the non-collection of the IEPS and the accreditation of ISR and VAT cost for importers and producers of Pemex?
In recent days, several calculations have been made public on the potential cost.
The economic analysis team of Banco Base, headed by Gaby Siller, calculates a cost of 330 billion pesos.
Bank of America pointed out that if the Mexican export mix is around 95 dollars per barrel, on average, during this year, the government would receive additional income of 2 points of GDP (close to 500 billion pesos), which would be spent on its stimulus policy.
The Mexican Institute of Finance Executives (IMEF) anticipated that it will cost the treasury about 30 billion pesos, monthly.
For the Monex economic analysis team, in the event that the subsidy is maintained at 100% for the rest of the year, tax revenues could fall by up to 6.0% compared to 2021, which would imply a shortfall of about 215 billion pesos. ; more than triple what was assigned to the construction of the Mayan Train in the current fiscal year.
And the Center for Economic and Budgetary Research (CIEP) calculates that it could generate revenue losses of around 554 billion pesos, equivalent to 2% of GDP.
While the increase in oil revenues derived from a higher oil price would be 643 thousand 941 million pesos.
Which would give a net result of an additional collection of 89 thousand 747 million pesos.
The truth is that such calculations may or may not be fulfilled. It depends on the duration of the invasion of Russia and Ukraine.
However, everything indicates that this geopolitical conflict, and more specifically the rise in the international price of oil that it has caused, “fell like a glove” to the government of Andrés Manuel López Obrador.
The sudden increase in the price of oil and the extraordinary income that the public treasury will receive could allow the current government to more than compensate for the effects of the lower expected economic growth, apply the subsidy to the price of gasoline, the decrease in oil production and the imminent increase of the cost of servicing the debt.
It is practically a stroke of luck, summarizes in its latest analysis the Center for Economic Studies of the Private Sector (CEESP) of the Business Coordinating Council.
And why is it a stroke of luck? Because despite everything, it is unlikely that by the end of 2022 public finances will be a risk factor for the country.
However, he warns, avoiding or mitigating the increase in gasoline prices may be right for the popularity of the regime, but not to improve growth or the well-being of households in the medium and long term, warns the CEESP.
Monex’s economic analysis team points out that it is difficult to consider that the subsidy policy will represent a major challenge for public finances, although if the magnitude of the incentives is maintained for several weeks, the results may be far from the objective of a primary deficit of 0.3% of GDP by 2022 and instead the figure reaches between 0.5% and 1.0% of GDP.
It seems that indeed, as the Secretary of the Treasury, Rogelio Ramírez de la O., said from the beginning, there is a natural hedge and a mirror effect between the income and expenses from the sale of oil and the importation of gasoline.
It seems that it is a stroke of luck for the lopezobradorista government. At the time
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He has worked uninterruptedly 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.