Fuel Retailers Renew Diesel Price Cap at MX$28/L

The April 21 meeting between President Sheinbaum and gas station operators produced a reinforced voluntary accord, but a PROFECO survey showing nearly a third of stations still selling above the ceiling, and analyst warnings about margins too thin to sustain, signal the limits of a policy that is simultaneously working and fragile.

The federal government and Mexico's fuel retail sector formalized on April 22 a reinforced agreement to maintain a maximum price of MX$28/L for diesel nationwide, following a ninety-minute meeting at the National Palace on April 21 chaired by President Claudia Sheinbaum. 

The agreement, communicated jointly by SENER and the Ministry of Finance (SCHP), extends a containment strategy that has been in place since February 2025 under the Política Nacional para Promover la Estabilización del Precio de la Gasolina en Beneficio del Pueblo de México, now formally expanded to include a diesel ceiling alongside the existing MX$24/L cap on regular (Magna) gasoline.

The meeting brought together representatives from SENER, SHCP, PROFECO, PEMEX, the Agency for Safety, Energy and Environment (ASEA), and the National Guard, as well as operators from Onexpo, Hidrosina, G500, Repsol, and Valores ABC. The agreement, framed as voluntary, commits participating stations to the MX$28 ceiling and commits the government to implementing additional actions to reduce the diesel price further.

The timing of the diesel accord reflects the specific pressure point that the US-Iran conflict has created in Mexico's fuel market. Unlike gasoline, which is primarily consumed by private motorists, diesel powers the country's freight network, long-haul trucking, agricultural machinery, passenger buses, and logistics chains for food and consumer goods. A sustained diesel spike translates quickly into broader cost inflation across the economy.

The liter of diesel rose 10.8% from the outbreak of the Middle East conflict in late February through mid-April, with some stations in regions such as Yucatan selling it at MX$28.99 and free-market dynamics suggesting it could have reached MX$32–33/L without government intervention. Sheinbaum stated in her morning press conference on April 20 that without active IEPS support and the voluntary cap, the retail price of diesel would have had no floor.

The policy runs on a two-track fiscal structure. The SHCP confirmed that the government will maintain IEPS stimulus subsidies for diesel alongside the voluntary retail cap. During the week of April 18–24, the IEPS stimulus for diesel stood at 43.17%, equivalent to MX$3.17/L forgone in tax revenue, substantially lower than the 81.2% stimulus applied during the peak of the price spike the prior week, as international prices moderated with the partial reopening of the Strait of Hormuz.

The Ministry announcement also included a complementary measure directly requested by operators: a reduction in the commissions charged by banks and payment processors on card, voucher, and electronic payment transactions at gas stations, a longstanding complaint from the sector that the government has now formally committed to addressing.

Compliance Gaps and Enforcement Tools

The agreement is voluntary in legal terms, but the government has made clear that non-compliance carries escalating consequences. Profeco Director Iván Escalante confirmed that as of April 22, 65.5% of stations were selling diesel below MX$28.50, but that approximately 34% remained in non-compliance, prompting inspectors to place 14 public warning banners, the "No Cargues Aquí" lona campaign, at non-compliant stations.

Sheinbaum warned non-compliant operators directly: "There is no reason for these prices. Public resources are being used to subsidize diesel... We are now using banners, but we are also going to conduct a full review with the SAT," the president said at her morning press conference, authorizing the SAT to initiate tax audits of stations that continue to overcharge.

Both parties agreed to meet again on April 28 to review the status of the market and determine whether the MX$28 ceiling would be maintained or adjusted. Paul Karam, Director General,Hidrosina, one of the largest fuel retail chains in the country, said after the meeting that the cap would hold "until things settle down."

Industry Sustainability Doubts

The agreement comes at a cost to operators that analysts consider structurally difficult to absorb for more than a short period. According to PEMEX data, diesel prices at storage and distribution terminals (TAR) stood at approximately MX$26.24/L, leaving retailers a margin of roughly MX$1.86/L under the MX$28 ceiling, a figure that Alejandro Montufar, CEO,PETROIntelligence, characterized as commercially unviable when operational costs, security requirements, and regulatory compliance are factored in. "With margins below MX$2/L, operation becomes complicated," Montufar stated.

Analyst Julia González reinforced the concern: "If maximum prices do not reflect the real costs of producers, transporters, and service stations, it becomes inoperable." The national average diesel price had recorded 13 consecutive days of decline ahead of the April 22 announcement but still stood at MX$28.41/L, above the agreed ceiling, underscoring that market convergence had not yet been achieved.

Both parties confirmed they will reconvene early next week to assess whether conditions allow for the accord to be extended or require further calibration.