Current Gasoline Prices and Trends
On July 13, the regular gasoline, also known as Magna, was being sold at an average national price of 23.46 pesos per liter, according to the consulting firm PETROIntelligence. The previous week, it was sold at 23.42 pesos per liter.
The federal government has left gasoline and diesel without any fiscal stimulus for the fourteenth consecutive week, while the regular gasoline price has increased by four cents in the last week and crude oil prices have risen more than 2%.
Rising Oil Prices
During the week, the U.S. West Texas Intermediate (WTI) oil increased by 2.2% to $68.45 per barrel, following the International Energy Agency’s (IEA) statement that the oil market was tighter than it appeared.
The IEA mentioned that the global oil market might be tighter than it seems, backed by strong summer demand for refinery production to meet travel and energy generation needs.
Despite the short-term market tightness, the IEA raised its growth outlook for oil supply this year while cutting its demand growth perspective, indicating an oversupplied market.
To further support short-term price outlooks, Russian Deputy Prime Minister Alexander Novak stated that Russia would compensate for its overproduction concerning the OPEC+ agreement this year during August-September.
Another signal of robust short-term demand was the prospect of Saudi Arabia shipping around 51 million barrels of crude oil to China in August, the highest volume in over two years.
Full IEPS Payment Required
Without fiscal stimulus, motorists will continue to pay the full Impuesto Especial sobre Producción y Servicios (IEPS) tax until July 18.
For regular gasoline (Magna), the full IEPS tax is 6.45 pesos per liter; for premium gasoline (roja), it’s 5.45 pesos per liter, and for diesel, it’s 7.09 pesos per liter.
Every Friday, the Secretaría de Hacienda y Crédito Público (SHCP) announces the fiscal stimulus amount for gasoline and diesel in the following week’s Federal Register.
Typically, the government adjusts fiscal stimulus based on oil prices: when crude rises, more fiscal stimulus is granted; when petroleum prices fall, fiscal stimulus is reduced.
Key Questions and Answers
- What is the current price of regular gasoline (Magna)? As of July 13, the average price is 23.46 pesos per liter.
- Why have gasoline prices increased? The rise is due to a 6.3% increase in crude oil prices over the past three weeks and the absence of government support since April.
- What is the reason for the oil price surge? The International Energy Agency (IEA) reported that the global oil market is tighter than it appears, supported by strong summer demand.
- How has the IEA adjusted its outlook? The IEA raised its oil supply growth forecast for this year while cutting its demand growth perspective, indicating an oversupplied market.
- What does Russia’s statement about OPEC+ imply? Russia will compensate for its overproduction concerning the OPEC+ agreement during August-September, supporting short-term price outlooks.
- What signals strong short-term demand? Saudi Arabia’s prospect of shipping around 51 million barrels of crude oil to China in August, the highest volume in over two years, signals robust short-term demand.
- Why are motorists paying full IEPS tax? The federal government has left gasoline and diesel without any fiscal stimulus for 14 weeks, causing motorists to pay the full IEPS tax.
