MEXICO CITY, April 10 (NNN-EFE) — The Mexican government blamed higher profit margins at fuel distributors for the increase in the price of gasoline and liquefied petroleum gas (LPG), but it said taxes would not be raised.
“The conclusion is that (the government) is keeping (its commitment) to not raising the price of fuel. However, the increases are occurring because the profit margins of the fuel distributors have gone up,” President Andres Manuel Lopez Obrador said during his daily press conference at the National Palace.
The president called on gasoline station operators and distributors to act “responsibly” and “not abuse” consumers.
“We are making an effort so that fuel prices will not go up. There aren’t going to be increases this year … like before,” Lopez Obrador, the founder and leader of the leftist National Regeneration Movement (Morena), said.
The president urged service station operators to rein in their profit margins to avoid having a direct impact on consumers.
Lopez Obrador, popularly known as AMLO, said an app listing the lowest gasoline prices would be introduced, adding that he would identify the service stations charging the highest and lowest prices for gasoline in Mexico during his daily press conference every Monday.
“And, finally, if this doesn’t work, we’ll create a group of stations ourselves in the country. Not many, but enough to sell (fuel) at a fair price,” AMLO said.
Deputy Finance and Public Credit Secretary Arturo Herrera, for his part, said service station profit margins were not “in the hands” of the government and thus varied.
Profit margins on regular gasoline, premium gasoline and diesel have risen in recent months, Herrera said.
“These increases have nothing to do with the government’s price-setting policy. These are price policies set by the service stations,” the deputy finance and public credit secretary said.
The subsidies provided by the government on a weekly basis under the IEPS program to ease the burden on consumers of fuel price hikes are currently largely absorbed by service station operators.
“Of every peso in subsidies, the service stations keep 63 cents,” the federal official said.
The situation is much the same in the LPG market, Herrera said, noting that “the increase in margins has been similar.”
The situation, however, is different in the electricity market, where the state-owned Federal Electricity Commission (CFE) is raising rates to gradually adjust them for the inflation registered in 2018.
Mexico deregulated gasoline prices in 2017, ending the process in December of that year.
Before the government started deregulating fuel prices in March 2017, officials had set price hikes in the range of 14 percent to 20 percent effective on Jan. 1, a move that led to protests across Mexico.
The administration of Lopez Obrador, who took office on Dec. 1, has vowed several times to not raise the price of fuel and other essential products above the inflation rate. — NNN-EFE
