MEXICO CITY – Mexico said Wednesday it will start raising gasoline prices weekly beginning this Friday, in a new policy that will be closely watched by investors concerned with rising inflation.
“The increase will be between two and three centavos (per liter),” Finance Minister Agustin Carstens told Mexican radio.
Mexico traditionally has adjusted retail gasoline prices by a few centavos a month, but in recent months the hikes have come more often and on an irregular basis.
Carstens would not specify which gasoline grade would rise in price. Most Mexicans use standard grade fuel, known as Magna. Premium-grade gasoline is more expensive.
The Mexican government, which controls prices for gasoline and diesel, will continue to push fuel prices closer to what U.S. consumers pay at the pump in the coming months, Carstens said. Rising prices for energy and food have sent Mexico's inflation rate to its highest level in more than five years. Consumer prices rose by 5.57 percent in the 12 months through August.
A shortfall in domestic refining capacity means Mexico imports about 40 percent of its gasoline and the government has used massive subsidies to shield consumers from soaring international fuel prices.
The government started increasing the size of each monthly gasoline increase in April.
The finance ministry has estimated the subsidy will cost public coffers about 240 billion pesos ($22.5 billion) this year, but a drop in international gasoline prices in recent weeks means the figure will probably be lower, Carstens said.
“It has been reduced at least 30 or 40 billion pesos,” Carstens said of this year's expected total subsidy.
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