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Opinion Blogs & Podcasts Story of the Week Gas hikes to kick in on a weekly basis
Opinion Blogs & Podcasts Story of the Week Gas hikes to kick in on a weekly basis | Gas hikes to kick in on a weekly basis |
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| Written by GR Staff | |
| Saturday, 20 September 2008 | |
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Gasoline prices will go up on a weekly basis to replace the monthly hikes introduced at the start of the year, Mexico’s Finance Secretariat announced this week. “Our aim is that the price of gasoline little by little converges with U.S. prices,” Finance Secretary Agustin Carstens said. The federal Congress approved a five-percent gasoline tax last year, which has been applied on the first of each month. In addition, since July the government has raised gas prices unilaterally on 18 other occasions to reflect international costs and try to reduce the government’s massive subsidy of imported gasoline. Ironically, pump prices in Mexico are rising at their fastest rate for several years at a time when international oil prices are starting to fall. Magna gasoline currently sells for 7.41 pesos a liter and has increased by 37 centavos a liter since the beginning of the year – just over five percent. Carstens predicted Magna gasoline would end the year between 8.50 and 9 pesos a liter. Economists say gas hikes could scupper the government’s adjusted inflation figures of around four percent. Carstens hopes the new pricing policy will allow subsidies to drop from 240 billion pesos to 138 billion pesos in 2009. It currently costs the federal government four pesos for every liter of imported gasoline. With Mexico’s production steadily falling, the country imports around 43 percent of its gasoline. Congress will vote in the fall on reforms to allow private investement in exploration and refining in a bid to restore the fortunes of Pemex, the ailing state oil monopoly. |
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