Another Price Hike: Gasoline, Diesel Up

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Increase reflects rebound in international crude prices

Fuel prices went up today in response to a recent increase in the price of crude oil. It was the second time in two months that gasoline prices have risen.

Magna gasoline is now priced at a maximum of 13.96 pesos per liter, up 56 centavos, premium is 14.81 pesos, an increase of 44 centavos, and diesel, 13.98 pesos, which is up 21 centavos. Gasoline prices are now 3% higher than they were a year ago.

In announcing the increase, the Finance Secretariat said the price hikes were within the range established for this year by Congress, which allows for prices to be adjusted according to international oil prices, but not by more than 3%.

According to a State of México business organization, most of the impact will be felt in small corner stores, or abarrotes, due to the cost of delivering dairy, bread and meat products. The Industrial Union of the State of México, or Unidem, said a typical delivery route in urban areas has as many as 22 such stores to service.

The additional fuel costs could mean those products will cost 2%-4% more for such stores within one or two months, said Unidem director Francisco Cuevas Dobarganes.

He said the government is hiking fuel and electricity prices because it has pledged not to increase taxes during the administration of President Enrique Peña Nieto. The price increases, which are needed to help balance spending in the wake of economic damage caused by low oil prices and other factors, represent a hidden tax, Cuevas said.