Fuel Sales Surge, Boost Tax Revenue

PEMEX reported an 8.1% increase in gasoline sales in May 2024, driven by increased production and a strategic effort to reclaim domestic market share. The subsequent collection of the Special Tax on Production and Services (IEPS) from gasoline contributed significantly to the rise in the country's tax revenues this year.

PEMEX gasoline sales in Mexico rose from 644.3Mb/d in May 2023 to 696.5Mb/d in May 2024. Statistics indicate that gasoline sales have grown for five consecutive months, averaging 662.5Mb/d annually so far. Over the past five years, PEMEX's share of gasoline sales in Mexico has increased by nine percentage points, reaching 87% of the market. Regarding diesel sales, PEMEX's market share grew by 13 percentage points, now commanding 76% of the market, with projections to reach 80% by the end of the year. PEMEX also maintains a 100% market share in jet fuel, reports Bloomberg.

Octavio Romero, CEO, PEMEX, emphasized that market recovery is due not only to higher production but also to a sales policy offering better services and products than competitors.

Meanwhile, tax revenues in Mexico have increased this year, coinciding with reduced fuel tax incentives and higher consumer taxes. Tax revenues totaled MX$2.132 trillion (US$117.21 billion) from January to May 2024, surpassing Federal Revenue Law (LIF) projections for this year by MX$5.513 million. The IEPS on gasoline and diesel underpinned this rise in government tax revenues.

From January to May 2024, IEPS revenue from gasoline and diesel reached MX$161.326 billion, nearly tripling the amount from the same period last year, reflecting a 148.4% real annual increase, according to Hacienda figures. January, April, and May 2024 were the best months for IEPS gasoline revenue during AMLO's term. This increase was due to Hacienda reducing the fiscal stimulus on fuels, thereby charging consumers the full IEPS quota.

Hacienda removed the fiscal stimulus for premium gasoline in the second half of October 2023 and for regular gasoline in January 2024, again in the second half of May, and the first half of June this year. For 2024, the IEPS quota was set at MX$6.1752/L for regular gasoline, MX$5.2146/L for premium gasoline, and MX$6.7865/L for diesel. While fiscal stimuli implies that Hacienda absorbs part of this quota to alleviate consumer costs, in 2024, consumers have paid most of the quota.