Mexico - 07

Mexico: The Impact of Fuel Price Increases

Beginning this month, an increase in fuel prices in Mexico will come into effect, with magna and premium gasoline prices rising by 14.2% and 20%, respectively, and diesel prices by 16.5%. A quite unpopular measure domestically, the increase is due to several factors. First, according to the Mexican government, subsidizing fuels by covering the differential between high international oil prices and lower, artificially set domestic prices was no longer feasible. From 2012 to 2014, the government invested, on average, 3% of GDP in fuel subsidies, which greatly contributed to increasing Mexico’s national debt.

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