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Pump price hike seen as minimal: Mexico regulator

17 Feb 2017 18:38 GMT
Pump price hike seen as minimal: Mexico regulator

Mexico City, 17 February (Argus) — An imminent pump price adjustment is likely to be minimal, Mexico´s energy regulator (CRE) told Argus today.

"Everything indicates that [gasoline and diesel] prices will not increase significantly. Market conditions are very favorable," said Guillermo Alcocer, head commissioner at the CRE.

Mexico's finance ministry is scheduled to update maximum fuel prices later today, as part of the gradual liberalization of the country's fuel market.

Earlier this month, the finance ministry decided to scrap two scheduled updates on 4 February and 11 February, after pump prices jumped by up to 20pc on 1 January when it first introduced a new pricing formula. The price hike sparked protests, and the ministry said at the time that it would intervene when possible to limit significant price hikes in the future.

The price formula takes into account international oil prices and the currency exchange rate. The Mexican peso has recovered stability following a volatile streak that accompanied new US president Donald Trump´s post-inauguration assertions on trade and tax policies relevant to Mexico. Oil prices have also shown more stability in recent weeks.

Fuel liberalization is one of the pillars of a groundbreaking 2014 energy reform that revoked the monopoly of state-run oil company Pemex.

Starting tomorrow, maximum fuel prices in 90 different regions will be updated on a daily basis, in a transition to market-driven prices that will be implemented gradually throughout the year, starting on 30 March in the northwestern states of Baja California and Sonora.