Mexico can subsidize gasoline, even if oil rises to $155

Mexico can subsidize gasoline, even if oil rises to $155

“We do not want to say that it is a perfect balance, but it helps us to handle an extraordinary situation,” the Treasury Secretary said Thursday in an interview on the sidelines of the Banking Convention held in Acapulco.

For a long time, President Andrés Manuel López Obrador has sought to avoid sharp increases in fuel prices that could prove politically damaging. The government recently extended a temporary exemption from the excise tax normally levied on gasoline as a way to contain rising prices.

Mexico’s economy ground to a halt in the second half of 2021 and is expected to grow just 2% this year, but Ramírez de la O said government aid to state-owned oil giant Petróleos Mexicanos will offset the cost of supporting producers. consumers.

The government has estimated that it could cover the total cost of the tax in scenarios in which a barrel of the Mexican crude mix is ​​located at 95, 105 or 155 dollars, he said. Mexico’s accounts will remain balanced unless oil prices fall while overall fuel prices rise, a scenario she said would be a once-in-a-lifetime event.

Mexican crude export mix averaged $111.94 a barrel on Wednesday, according to the Pemex website.

“We are also reasonably certain that the gasoline blows are not conducive to social peace,” Ramírez de la O said during the interview.

In recent days, López Obrador has boasted that prices at service stations in Mexico are lower than those in the US It is very likely that Mexico will delay its plan to halve crude exports this year to take advantage of the recent price increase, Bloomberg reported in early March.

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