A last-minute change of plan saw federal authorities lower the announced start-of-year gasoline price increase from three to 1.9 percent.
January 1 Magna gas went up to 13.57 pesos a liter, while Premium now costs 14.38 pesos a liter and diesel fuel 14.20 pesos a liter.
Officials at Mexico’s Treasury Department said the gas hike is the only one planned for 2015, although they stressed that the executive branch has the authority to implement any additional increases it deems necessary in case of “market volatility.”
The officials said the move was not related to the sharp drop in the price of crude oil but due to a “reassessment” of the income that will be generated from the hike.
The 1.9-percent hike is less than the projected inflation rate for 2015 of between three and four percent, they noted.
The single increase this year replaces the monthly gas hikes that have seen the cost of gasoline in Mexico increase by around 3.5 percent a year since 2009.
The change represents the first stage of the process to eliminate government control of gasoline prices. Under the energy sector reforms enacted last year, free market principles will start to come into effect this year, with gas station operators permitted to offer gasoline at rates lower than the official retail tariff. By 2017, Pemex will no longer be a monopoly and foreign oil companies will be permitted to sell their fuel in Mexico.
Border bonus
Mexicans living in the border region with the United States are the only ones benefitting from falling oil prices.
There, the Mexican government deliberately keeps the price of gasoline in line with the lower U.S. rates to discourage citizens from filling up their tanks across the border.
Magna in the border region sells for 7.97 pesos a liter and Premium for 9.19 pesos.
Pump prices in the United States have dropped dramatically since the oil price dip began last fall.
For example, according to gasbuddy.com, the average cost of gasoline in Texas at the beginning of 2015 was $US1.96 a gallon, equivalent to around 7.65 pesos a liter – just over 40 percent cheaper than Mexico (excluding the border zone).