Prices of Oil, Diesel will Remain Stable: SHCPBy Emilio Aristegui | Wed, 03/09/2022 - 09:25
The rise in supply chain costs, oil and diesel after Russia’s invasion of Ukraine has affected the entire world but Mexico’s Ministry of Finance and Public Credit (SHCP) committed to keep prices below inflation rates.
SHCP “published an additional incentive for gasoline and diesel so the public prices of these fuels do not increase in real terms and, this way, protect the purchasing power of Mexicans. The Government of Mexico has a commitment to society that the price of fuels does not increase beyond inflation,” reads a SHCP’s press release.
Oil and gas prices increased drastically following Russia’s invasion of Ukraine. Russia currently supplies 10 percent of the world’s oil and one third of the EU’s gas. The price increase severely affected key supply chains, so many products have suffered cost increases. President Andrés Manuel López Obrador previously stated that Mexico is prepared to face the crisis if hydrocarbon prices increase over global inflation and interest rates, as reported by MBN.
Mexico’s alleged preparedness is linked to the Special Tax on Production and Services (IEPS), which aims to protect the purchasing power of the Mexican population by avoiding increases in gasoline and diesel prices in real terms, said SHCP. However, the Ministry acknowledges that the recent geopolitical tensions in the world have brought sharp increases in crude oil prices and in international references for gasoline and diesel, essential fuels for mobility and the transportation of goods.
The government will grant an additional stimulus to the IEPS of gasoline and diesel to support the Mexican population, according to SHCP. “The Ministry of Finance will maintain close monitoring and will be attentive to the evolution of fuel prices so that this benefit reaches the population. With this new support, the Government ratifies its commitment to the population to prevent fuel prices from rising more than inflation,” said SHCP.