Goodbye to Gasoline and Diesel Subsidies: A Significant Change

15:15 27/09/2024 - PesoMXN.com

Gasoline Magna and Premium, as well as diesel, are now entering their first month without subsidies applied to the Special Tax on Production and Services (IEPS). According to an announcement from the Ministry of Finance and Public Credit (SHCP) in the Official Gazette of the Federation (DOF), for the week of September 28 to October 4, these fuels will not receive any subsidy, meaning the subsidy will be 0%. Therefore, the IEPS rate per liter will be set at 6.17 pesos for Magna gasoline, 5.21 pesos for Premium, and 6.78 pesos for diesel.

This situation marks the fourth week and the first month in which the three types of fuels have not received a joint fiscal stimulus. Generally, Premium gasoline and diesel have not had discounts this year, while support for Magna gasoline has been gradually eliminated over the past four weeks. The reduction in subsidies has led to higher revenues for the SHCP, which from January to August of this year has seen an 82% increase in IEPS collection compared to the same period last year. In total, 268,878 million pesos have been collected from this tax, compared to 140,998 million last year, according to the latest information provided by the Ministry of Finance.

Why are IEPS discounts implemented? The federal government establishes these discounts mainly to prevent an unchecked rise in fuel prices when oil costs increase, in order to avoid negative impacts on inflation. As subsidies applied by the Ministry of Finance decrease, there is an observed increase in revenue from tax income. Fuel Prices According to data from PetroIntelligence, on Friday, September 27, the average price per liter of Magna gasoline is 23.93 pesos, Premium gasoline is 25.37 pesos, and diesel is 25.49 pesos.

This change in subsidy policy may be a risky strategy, as although it may improve tax revenue, it could impact the cost of living for citizens. It is crucial for the government to find a balance between maximizing revenue and maintaining economic stability for consumers, especially in times of high inflation. The management and elimination of these subsidies have the potential to affect various sectors of the economy, so their evolution should be closely monitored.