Mexico Fuel Overhaul Ends Premium Gasoline Subsidy and Shifts Support to Diesel
Mexico's Finance Ministry ended the fiscal stimulus on Premium gasoline, trimmed the break on regular Magna, and steered the biggest support toward diesel. The post Mexico Fuel Overhaul Ends Premium Gasoline Subsidy and Shifts Support to Diesel appeared first on The Rio Times .
Mexico's fuel policy underwent a significant change this month, ending a subsidy for premium gasoline and shifting support to diesel. The Finance Ministry, known as Hacienda, announced the shift in weekly tax breaks that determine pump prices. Premium gasoline, the higher-octane grade, no longer receives any stimulus and now incurs the full statutory IEPS tax, roughly 5.66 pesos (US$0.33) per litre.
In contrast, regular gasoline maintained a small subsidy, and diesel retained the largest support, covering about 69% of its tax. Diesel prices are crucial for Mexico's freight and farming sectors, making cheaper diesel a deliberate choice to keep transportation costs low. The cap on regular gasoline remains at 24 pesos (about US$1.40) per litre, renewed recently for six months.
This dual approach of capping regular gasoline and providing substantial support to diesel aims to protect family budgets, curb inflation, and maintain stable pump prices. The cap on regular gasoline helps stabilize headline prices, which directly impacts inflation rates and the value of the peso. However, allowing premium gasoline prices to rise enables the government to save money without directly affecting the prices most households monitor.
The diesel subsidy's expiration after six months will require the government to decide on renewal or allow regular gasoline prices to fluctuate further.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
