Gas Prices Have Gone Up



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TBC

The next time you head over to your local Pemex gas station and fill up your car with magna, premium or diesel, you will be sure to notice that you are paying a lot more than you did before the New Year.

We can back up to last year to explain the price of gasoline today. In May of 2013, the Secretaria de Hacienda y Crédito Público (SEC) announced in a press release that the price of magna gasoline and premium gasoline would have an increase of 10.9 centavos each month until the end of the year.

These scheduled price increases were to put Mexico in line with gas prices in other countries. For years, Mexicans enjoyed relatively much lower gas prices than the rest of North America.  Baja California Sur (BCS) and other border states were taxed at 11% IVA (value added tax) and not the 16% IVA the rest of country paid.

However, as of January 1st of this year, BCS will be paying the national standard 16% sales tax on gasoline.  On top of the steep monthly increases of last year on gasoline, an extra 5% IVA will now be charged at the pump.

If gasoline prices continue to increase at 9 centavos a month, it is projected that by the end of 2014, magna (regular) gas could cost 13.31 pesos a liter and premium gas could climb to 14.11 pesos a liter.  If projections are correct, the price of magna gasoline in Mexico will have doubled since 2006.

It is noteworthy that there is only unleaded gasoline (magna – regular and premium UBA – super gasoline) in Mexico. Magna is 87 octane. Premium gas is not only higher octane (91) but lower in sulfur (15 ppm).

Pemex is Petróleos Mexicanos which translates to Mexican Petroleum. It is the Mexican state-owned and controlled petroleum company, created in 1938 by nationalizing all privately owned foreign and domestic companies. Gas prices in Mexico are set nationally.

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