Gasoline Prices Rose Above Inflation in 2019

The national average price for regular gasoline in Mexico ended 2019 at MX$19.35 per liter, the Regulatory Energy Commission reported. This represents a year-on-year increase of 5.61 percent over 2018, a figure 2.78 percentage points higher than the inflation.

By the end of last year, premium gasoline was priced at MX$20.78 per liter. This represented an increase of 4.5 percent on 2018 prices, far above the the 2.83 percent yearly inflation reported by INEGI last week.

Diesel recorded the highest increase among fuels at MX$21.1 per liter, rocketing 8.61 percent higher than last year’s price and almost three times the inflation rate.

This is bad news for President López Obrador’s campaign promise to control fuel prices to avoid steep gas price hikes, known as “gasolinazos” in Mexico.

The main factor behind these price changes were changes in government’s fiscal stimulus. Throughout 2019, fiscal stimulus for regular fuels was 16 percent of the Special Tax on Production and Services (IEPS), well below the previous year’s 43 percent. Premium gasoline stimulus was only 3.3 percent against 23 percent in 2018. Diesel stimulus was 16 percent of IEPS, in contrast to 46 percent in 2018.

Prices in December, when regular gasoline consumed by 85 percent of motorists averaged MX$19.44 per liter, had a monthly increase of 0.63 percent according to CRE.

Gasoline prices were released from government control in 2016, and last year the most stable prices were recorded. Magna gasoline in Mexico increased from MX$15.8 per liter in 2017, to MX$18.3 per liter in 2018 and MX$19.4 per liter in 2019.

According to the Mexican Petroleum Institute, in 2018 each motorist paid an average of MX$779.2 when filling a tank of approximately 40 liters. For 2020, people will pay close to MX$850.8 for the same amount.