After years of sustained hikes, motorists will be pleased to learn that the cost of gas will be lowered as of January 1.
This the first time ever that gasoline in Mexico has fallen in price,
It is also the first step in a process that will culminate in the complete elimination of price controls in 2018. The Mexican government has been setting the price of gasoline for the past 78 years.
Before its holiday break, Congress approved a new system that will see pump prices fluctuate in tune with “international oil prices” inside a “band” that will allow maximum hikes or decreases of three percent in either direction.
Two additional factors may also influence the government to intervene: a dramatic fluctuation in the country’s inflation rate (2.2 percent November 2014-November 2015) or seasonal variations in crude production.
From January 1, Magna will cost 13.16 pesos a liter (down from 13.57), Premium 13.98 pesos (previously 14.38) and Diesel 13.77 pesos (previously 14.20).
One of the reasons for the new policy is to gradually acclimatize the nation to a liberalized pricing structure, Treasury spokesman Miguel Messmacher explained this week.
The new pricing system stems from reforms passed in 2013 that open up Mexico’s energy sector to private investment after decades of government control.
A new development in 2016 will allow companies other than Petróleos Mexicanos (Pemex) to open gas station franchises and sell gasoline and other products.
In addition, the Mexican government will continue its auctions of oil and gas leases to private concerns. The third and most recent auction was held on December 15 and featured 25 onshore leases — including four medium-size blocks and 21 small fields. Government officials deemed the auction a success, with bids tendered for all the blocks on offer, many of them from emerging Mexican companies.