Background on the Situation
For the sixth consecutive week, the federal government has left gasoline and diesel without fiscal incentives. This decision comes as the price of regular gasoline, known as “Magna,” remains stable, while international oil prices continue to rise.
Current Gasoline Prices
As of Sunday, May 18th, the average national price for regular gasoline, or Magna, is 23.62 Mexican pesos per liter—a one-cent decrease from the previous week.
- Regular gasoline (Magna): 6.45 pesos per liter IEPS
- Premium gasoline (Red): 5.45 pesos per liter IEPS
- Diesel: 7.09 pesos per liter IEPS
Rising Oil Prices
The U.S. West Texas Intermediate (WTI) crude oil benchmark increased by 2.4% during the week, reaching 62.49 US dollars per barrel—its second consecutive week of gains.
The positive market sentiment was fueled by an agreement between the United States and China, the world’s largest oil consumers, to implement a 90-day truce in their trade war. This truce includes significant reductions in tariffs between the two countries.
Mexico’s Fiscal Policy
In Mexico, the Secretariat of Finance publishes weekly fuel incentives for gasoline and diesel in the Official Gazette (DOF) every Friday.
The amount of these incentives is typically tied to international oil price trends. When oil prices rise, the government provides more incentives and collects less IEPS (Impuesto Especial sobre Producción y Servicios). Conversely, when oil prices fall, incentives are reduced, and more IEPS is collected.
This fiscal policy aims to stabilize fuel prices in Mexico and mitigate the impact of sudden international oil price increases.
Key Questions and Answers
- What is the current situation with gasoline prices in Mexico? For the sixth week, there are no fiscal incentives for gasoline and diesel. The average price of regular gasoline (Magna) is 23.62 Mexican pesos per liter.
- How do international oil prices affect Mexican gasoline prices? The Mexican government adjusts fuel incentives and IEPS collection based on international oil price trends to stabilize domestic fuel prices.
- What recent developments have impacted oil prices? The U.S. and China agreed to a 90-day truce in their trade war, which led to a positive market sentiment and contributed to rising oil prices.
