Gas prices still rise as consumers wait for reforms’ benefits

Market forces have yet to contain gas prices in Mexico. Photo: Sipse
Market forces have yet to contain gas prices in Mexico. Photo: Sipse

Gas prices continue to rise, but by 2019, market forces will benefit consumers, said a business chamber leader.

By then, private companies will have started to import gasoline. For now, 99 percent of all available fuel still comes from Pemex.

The general secretary of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco), José Manuel López Campos, said that half of what we’re paying at the pump is for taxes, both VAT and the IEPS (Special Tax on Products and Services).

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“At the moment there are no conditions for price competition that can be reflected in the consumer’s pocket,” López Campos said.

Market reforms meant to help consumers can’t help them immediately.

“It will take time for them to import gasoline. It is a process that has already started; probably by 2019 we will see real fuels different from those distributed by Pemex, and with that, price differences will start to be reflected,” he said.

He commented that in 2018, gas stations will have products other than Magna and Premium gasolines, and they will be very different from those currently sold by Pemex, which still dominates Mexico’s selection of gas strations.

López Campos said that the most recent increase in gasoline was mainly due to strength of the U.S. dollar and crude oil costs, now at $57.85 a barrel.

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Brand-name gas stations, from Costco, Gulf, Exxon, Mobil, Texaco, Lukoil, Valero and Walmart, are due to appear in Yucatán’s in 2018.

An analysis by the state Department of Urban Development and Environment (Seduma) estimated a growth prospect of about 250 new gas vendors, while the business chamber Canacintra says that twice that many could succeed here. Milenio News estimated that at least 500 gas stations are needed in Yucatán to meet the needs of a growing population.

Source: Sipse

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