Will the increase of IEPS in the species mean that there will be "gasolinazo" in January?

The Ministry of Finance announced Friday that the quota for the special tax on gasoline and production (IEPS) would increase from 1 January.

The Magna gasoline quota will increase from 4.59 pesos to 4.81. That of the premium from 3.88 to 4.06, and that of diesel from 5.04 to 5.28 pesos.

In addition, the dependence has decided to keep the fiscal stimulus at zero, that is to say that consumers will pay the tax in full.

Does this mean that prices will increase next month, that is, there will be "gasolinazo"?

The answer is: not necessarily.

Because?

Mexico has an open gasoline market, which means that the final price is determined by the companies that sell it. They can decide whether or not to transfer all the costs.

It's happening now. For example, at the town hall, Benito Juárez, a liter of Magna can be obtained at a maximum price of 20.19 pesos and a minimum of 19.24 units, depending on the service station, according to the figures from the Regulatory Commission of energy.

In addition, prices tend to fall, despite the fact that since the last week of November, the government of the incumbent President, Enrique Peña Nieto, has decided to completely withdraw gasoline stimulus measures, which have been gradually reduced to arrive in the week. to zero.

This stimulant was that the government has absorbed some of the IEPS that fuels have.

On November 23, just before stimulus measures were completely removed, Magna gasoline was sold at 19.76, 20.71 and 19.92 pesos in Monterrey, Guadalajara and at City Hall Benito Juarez from Mexico.

Since December 28, without gasoline, gasoline is sold in the same places at 19.01, 19.76 and 19.65 pesos, a reduction of 3.8, 4.5 and 1.3% respectively, according to the PETROIntelligence data.

This downward trend is also evident in the United States, particularly Texas, the benchmark state of gasoline prices.

In this state, regular gasoline, the least expensive, is currently sold at $ 1,954 per gallon, down 10% from $ 2,193 a month ago, according to data from the United States. AAA Gas Prices.

The drop in gasoline prices is also influenced by the decline in oil prices.

The price of US crude WTI fell 10% last month and closed Friday to December at 45.33 dollars, according to Bloomberg figures.

President Lopez Obrador promised that the price of gasoline would not rise beyond inflation, as the government predicted 3.4% next year.

In case of increasing international prices, the government could "stop" the rise of gasoline in the local market by stimulating the IEPS.

A few weeks ago, Roberto Díaz de León, president of the National Organization of Petroleum Exporters (Onexpo), told El Financiero that, as the international reference price has tended to fall, it is expected that 39 Tax Authority do not use stimuli for the moment.

"Due to seasonality, we will not be witnessing a change in this regime, but most likely in the early spring, when price trends may change," he said.

"We are very optimistic that the Ministry of Finance will use this IEPS tool to avoid sharp fluctuations if international reference prices change," added Díaz de León.