Mexico Navigates Fuel Price Hikes

Gasoline prices in Mexico could rise to MX$30/L in 2025, according to federal legislator Guillermo Anaya. He criticized the government’s handling of fuel pricing, stating that despite assurances from President Claudia Sheinbaum, prices continue to climb instead of stabilizing. Anaya emphasized the financial strain on low-income families, noting that rising gasoline prices impact all sectors of the economy.

"There is no truth to the government's promises," Anaya said. "Since López Obrador's time, we were told gasoline would not surpass MX$10/L. That has proven to be one of the most harmful lies for the population."

Anaya proposed a price cap of MX$20/L for gasoline and diesel, but the MORENA party, holding a majority in Congress, rejected the proposal.

The government is working to stabilize fuel prices. In a recent press conference, President Sheinbaum addressed the issue, stating that the national average for fuel prices is approximately MX$23/L, though some regions are seeing prices as high as MX$26/L. Sheinbaum ordered the Ministry of Energy (SENER) to meet with fuel station owners and distributors to discuss measures to prevent further increases.

Since the 2013 energy reform, Mexico no longer sets maximum fuel prices, leading to reliance on market forces and imports. Sheinbaum clarified that the increase in the Special Tax on Production and Services (IEPS) last week, which rose by 4.5%, was an inflationary adjustment and not a direct fuel price hike. She reassured the public that fuel prices should remain stable as long as oil prices do not spike.

As part of the government’s strategy to stabilize fuel prices and protect consumers from gas stations charging excessive rates, the Federal Consumer Protection Agency (PROFECO) created a campaign against "abusive" pricing practices by placing banners warning customers of non-compliance. The initiative, which began in northern Mexico, will expand to central regions. 

PROFECO Head Iván Escalante announced the measure during President Sheinbaum's morning press conference, identifying stations with the highest and lowest fuel prices. The campaign was launched on Jan. 9 to verify adherence to the government's price cap of MX$24/L for regular gasoline. These banners serve as a warning rather than a sanction, and stations cannot remove them until prices comply with the mandated limit.

Meanwhile, the government’s strategy is to achieve its energy self-sufficiency goal established by former President López Obrador. PEMEX’s production of Ultra-Low Sulfur Diesel (ULSD) is another area of concern. As reported by Oil and Gas Magazine, the NOC has significantly increased its ULSD production, reaching 125Mb/d in November 2024, up 348% from 27.9Mb/d in November 2018. However, the company still faces logistical challenges, particularly in distributing DUBA to regions with high demand, such as the western and northwestern parts of Mexico.

Despite a reduction in diesel imports by 54% over the past six years, PEMEX still relies heavily on imports. In November 2024, 121Mb/d of diesel were imported daily, nearly matching the amount refined domestically. PEMEX refineries in Madero and Salina Cruz do not produce ULSD, meaning that regions in the northwest and southeast rely on imports and inventories.

With the implementation of Euro VI and EPA 10 standards for transportation in 2025, which require the exclusive use of ULSD, PEMEX must continue optimizing its refining capacity and distribution to meet these new standards. This is vital to avoid disruptions in transportation services, particularly for freight and passenger vehicles.

PEMEX’s success in meeting these demands will depend on refining strategies that address regional requirements while increasing domestic production. The company is under pressure to ensure that Mexico’s energy infrastructure can keep up with the country's evolving environmental regulations.