Hacienda Raises Subsidies for Magna and Diesel, Keeps Premium Unsubsidized

Overview

• The Secretaría de Hacienda y Crédito Público published in the Diario Oficial de la Federación that for the week of July 11–17 the subsidy for gasoline Magna rises to 15.95%, equal to 1.06 pesos per liter, which sets the net IEPS charge for Magna at 5.63 pesos per liter.
• Diesel receives a larger increase to a 26.26% subsidy, equal to 1.93 pesos per liter, leaving the diesel IEPS quota at about 5.42–5.43 pesos per liter for the same week.
• Gasoline Premium remains at a 0.00% stimulus so motorists using premium fuel will pay the full IEPS at roughly 5.6579 pesos per liter.
• Officials tied the larger subsidies to a weekly rise in Brent and WTI prices after military exchanges between the United States and Iran raised concerns about supply through the Strait of Hormuz.
• The IEPS stimulus is a weekly fiscal tool that lowers the tax passed to consumers but final pump prices still depend on exchange rates, refining and transport costs, station margins and imports, and the DOF said there will be no additional complementary subsidies this week.