Mexico City, Dec 27 (EFE).- The Mexican government announced Tuesday that gasoline prices will increase between 14-20 percent in January 2017, an increase forecast by the Pemex state oil company, and before the liberalizing of prices in the sector begins next March.
According to the Mexican Secretariat of Finance and Public Credit (SHCP), “these new price ceilings represent increases for Magna and Premium gasolines and diesel fuel of 14.2 percent, 20.1 percent and 16.5 percent, respectively, compared with the maximum prices seen in December 2016.
It also said “the increase reflects the hike in international fuel prices, and that new or different taxes play no part.”
“International prices for Magna and Premium gasoline and for diesel fuel were significantly higher in the last quarter of 2016,” it said.
The secretariat added that “maximum prices will remain in force as long as there is no flexibility in the fuel market of a region.”
It also noted that “maximum prices will now be adjusted with greater frequency than in 2016,” since “from January to Feb. 3, 2017, there will be a single maximum price, but afterwards in February prices will be updated twice in the first two weeks of the month.
“From Saturday, Feb. 18, prices will be adjusted daily,” it said.
To set the new rates, “the country will be divided into a total of 90 regions, which correspond to the areas supplied by the existing storage and distribution infrastructure of Pemex.
The increase complies with a policy applied in 2015 by President Enrique Peña Nieto to bring the national gasoline market “up to date.”
The policy was continued in 2016, “so this market would reflect international conditions with a tax per liter,” and in 2017, “to continue the process, maximum prices will be determined by region and will reflect the logistic costs of Pemex.”
Pemex was already anticipating these increases last week, when it talked of establishing maximum regional prices and a system for monitoring the prices to the public, in order to avoid abuses when liberalization of the sector begins next March.
On Jan. 1, 2018, the entire country will have deregulated prices on gasoline, as the market shifts from having a single supplier, Pemex, to a system of multiple competing companies providing fuel to the whole country, as part of the energy reform introduced by Peña Nieto during his term in office (2012-2018).