IEPS on Magna Gasoline Increases: Two Weeks Without Subsidies
12:11 13/09/2024 - PesoMXN.com
The Ministry of Finance and Public Credit has decided to eliminate the subsidy for the Special Tax on Production and Services (IEPS) for each liter of magna gasoline, as indicated in the Official Diary of the Federation (DOF) published this Friday. This marks the second consecutive week in which the revenue agency will apply the full IEPS rate on this type of fuel.
Why are discounts applied to the IEPS? Gas Prices
During the week of September 14 to 20, which includes the long weekend commemorating the start of the struggle for Mexico's Independence, consumers will have to pay 6.1752 pesos of IEPS for each liter of magna gasoline; 5.2146 pesos per liter for Premium, and 6.7865 pesos per liter for diesel. Up until that date, the government had applied IEPS discounts for magna gasoline only until September 7, while both magna and diesel have largely gone without this government aid for most of the year. These discounts are provided by the federal government in order to prevent an excessive rise in fuel prices when oil costs increase, thus trying to control inflation. By reducing the subsidy that the Ministry of Finance applies, the government increases its revenue through tax income. On Friday, September 13, the average price of magna gasoline reached 24.029 pesos per liter, Premium reached 25.520 pesos, and diesel reached 25.621 pesos, according to data from PetroIntelligence.
Final comment: The removal of subsidies for the IEPS may bring immediate fiscal benefits, but it could also heighten inflationary pressure on consumers. It is crucial for the government to find a balance between fiscal needs and the protection of the population's purchasing power, as a persistent increase in fuel prices could negatively impact the economy as a whole.
