A price escalation will come that will hit the pockets of all the inhabitants equally”.
Christiaan Edoardo Pérez Cosío, technical secretary of the state federation of Tamaulipas Chambers of Commerce.
President Andrés Manuel López Obrador assured that gasoline prices on the northern border and fiscal stimuli are being maintained.
He said that the Ministry of Finance and Public Credit (SHCP) generalized the withdrawal of the IEPS (from April 2 to 8) without taking into account that in the border strip there is a decrease in the price of fuel with respect to the rest of the country, but that was corrected and solved the problem.
“Over the weekend there was a decree, and it was generalized and it was not taken into account that there is a decrease in the price of fuel on the border. In addition to (the stimuli) that are applied at the national level, gasoline costs less on the border than in the rest of the country and in the Treasury it is generalized, ”he explained.
Last Sunday, the SHCP reported in a statement that from April 2 to 8 in the 41 municipalities located on the border between Mexico and the United States, the fiscal stimulus would be zero pesos, in the states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas.
However, yesterday an agreement by the SHCP was published in the Official Gazette of the Federation where only in Zone I (which make up the municipalities of Tijuana and Playas de Rosarito in Baja California) the incentive for Magna and Premium gasoline would be zero pesos, instead Tecate and Mexicali have small incentives.
The area with the greatest stimuli is the one that considers Piedras Negras, Nava and Hidalgo, in Coahuila, and Nuevo Laredo, Guerrero, Mier and Valle Hermoso, in Tamaulipas.
“The Ministry of Finance and Public Credit published today, in the Official Gazette of the Federation, the amounts of the tax incentives applicable to the disposal of gasoline in the border region with the United States, until this Friday, April 8. These amounts cover the states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas, and will be applicable within the 20-kilometer border strip and in the territory between the parallel lines of more than 20 kilometers and up to 45 kilometers to the international dividing line with the United States,” the report said.
“The Treasury published in the DOF the agreement that discloses the amounts of the tax incentives applicable in the border area with Guatemala, applicable until Friday the 8th in the states of Campeche, Chiapas and Tabasco,” he added.
This measure of withdrawing stimuli in an area of the northern border strip “is due to a combination of factors: a budgetary restriction, where the federal government seeks to optimize resources and does not have enough subsidy to cover the entire country; in the second instance, the fact that gasoline is cheaper on the Mexican border creates incentives for Americans to cross to load gasoline and that creates shortages,” José Luis de la Cruz Gallegos, director of the Institute for Development, told El Economista. Industrial and Economic Growth (IDIC).
The third point, he deepened, is that they seek to have control over the price of oil and decide to standardize fuel prices to prevent neighboring municipalities from going to load gasoline where there are more stimuli.
It is worth mentioning that the technical secretary of the Tamaulipas State Federation of Chambers of Commerce, Christiaan Edoardo Pérez Cosío, commented to the local press that “a price escalation will come that will hit the pockets of all the inhabitants alike” and assured that there will be more fuel hikes.
Impact on public finances
In this regard, José Luis de la Cruz said that when price controls are put in place it is a sustainable measure in the short term, “we must see what it implies for public finances, because this subsidy implies lower income” and due to the volatility of oil revenues could incubate a more serious problem.
Héctor Magaña Rodríguez, an expert at the Tecnológico de Monterrey, agreed that there could be a negative impact on public finances if the stimulus for gasoline is prolonged in the medium term.
“Because despite the higher remuneration obtained by the current administration for the increase in the price of the Mexican export mix, they are exceeded by fiscal stimuli, due to the fact that oil production in the country has been declining in recent years. recent years compared to the amount of gasoline that is obtained by import”, he said.
On the other hand, he considered that if at the end of the year the level of growth proposed in the precriteria of the Ministry of Finance is not achieved, public finances will be pressured, so that cuts could be observed in some social or infrastructure programs or even “visualize a higher level of indebtedness.
In addition, “it is difficult to estimate whether the surpluses due to the price of oil will be enough to generate support, due to the disruption in several supply chains caused by the pandemic that have not yet been mitigated and there is no certainty about the duration of the armed conflict between Russia and Ukraine. Both factors affect the increase in the price of oil, as well as the increase in the prices of raw materials and food, emphasized Héctor Magaña.
Enough
The President of the Republic reiterated that they have enough supply and “although this subsidy is being allocated so that the price of gasoline does not increase, it helps people a lot.”
“In the case of the border, we help Mexicans who have dual nationality and also Americans, who are our neighbors and who are coming to load Mexico at the border because gasoline is much cheaper in Mexico than in the United States. It is an act of solidarity for them as well”, he affirmed.