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Fiscal stimulus returns to Premium gasoline; subsidies increase for diesel and Magna, IEPS tax decreases
🇲🇽 Mexico /Economy & Trade

Fiscal stimulus returns to Premium gasoline; subsidies increase for diesel and Magna, IEPS tax decreases

From El Universal · (16m ago) Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

TLDR

  • Mexico will reinstate fiscal stimulus for Premium gasoline, while increasing subsidies for diesel and Magna gasoline, and reducing the IEPS tax on fuels.
  • Premium gasoline will receive a 26.53% fiscal stimulus, reducing the IEPS tax by 1.50 pesos per liter.
  • Diesel will see the largest subsidy increase, from 33.22% to 60.76%, with Magna gasoline also receiving a higher stimulus of 38.08%.

In a move aimed at stabilizing fuel prices and cushioning the impact of inflation, the Mexican government, through the Ministry of Finance and Public Credit (SHCP), has announced a series of fiscal adjustments to gasoline and diesel prices. Effective from May 2 to May 8, these measures include the return of fiscal stimulus for Premium gasoline and significant increases in subsidies for diesel and Magna gasoline.

Premium gasoline will have a fiscal stimulus of 26.53%, equivalent to 1.50 pesos.

— Secretariat of Finance and Public Credit (SHCP)Announcing the fiscal stimulus for Premium gasoline.

For Premium gasoline, consumers will once again benefit from a fiscal stimulus, this time set at 26.53%. This translates to a reduction of 1.50 pesos in the Special Tax on Production and Services (IEPS) that consumers would otherwise pay. This adjustment comes after two weeks without such support, during which Premium gasoline was identified as a contributor to inflation.

The biggest support will be for transporters, as the fiscal stimulus for diesel this week will be from 33.22% to 60.76%, that is, 4.47 pesos.

— Secretariat of Finance and Public Credit (SHCP)Detailing the increased subsidy for diesel.

The most substantial support will be directed towards diesel, a critical fuel for the transportation sector. The fiscal stimulus for diesel will nearly double, rising from 33.22% to 60.76%. This significant increase effectively reduces the IEPS quota by 4.47 pesos per liter, bringing the price down and easing the burden on truckers and logistics companies. This measure aligns with a recent agreement between the federal government and gasoline station owners to cap diesel prices at 27 pesos per liter.

The fiscal stimulus for Magna gasoline will be 38.08% higher than the 15.68% this week.

— Secretariat of Finance and Public Credit (SHCP)Explaining the increased subsidy for Magna gasoline.

Similarly, consumers of regular Magna gasoline will also see an enhanced subsidy. The fiscal stimulus for Magna will increase to 38.08%, up from the current 15.68%. This adjustment aims to keep the price of Magna gasoline capped at 24 pesos per liter for the public. These measures, while providing relief to consumers, come at a significant fiscal cost, with the government estimating that fuel subsidies represented 11.7 billion pesos in March alone, and a weekly revenue loss of 2.5 billion pesos due to IEPS reductions.

In March alone, the subsidy for fuels represented a cost of 11.7 billion pesos.

— Undersecretary of Revenue of the Secretariat of FinanceQuantifying the cost of fuel subsidies in March.
DistantNews Editorial

Originally published by El Universal in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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