Controlling the price of gasoline would cause losses of 205 billion pesos

Mexico City.- The additional subsidies that the federal government is granting to the Special Tax on Products and Services (IEPS), to control the price of gasoline and diesel, will cause a net loss of between 119 thousand 300 million pesos and 205 thousand 500 million pesos at the end of this year for public finances, estimated the Mexican Institute for Competitiveness (Imco).

In its analysis, “The price of oil in public finances,” the organization calculated the cost that the cost of fiscal incentives for fuel would cause to the public account, as well as the estimate of additional oil revenues due to the rise in oil prices.

After that, he concluded that the balance on public finances would be negative.

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Imco built three scenarios in which the price of the Mexican export mix would have a linear impact that would arrive at the end of December this year, with annual averages of 70 dollars per barrel in a low-impact scenario, 90 in a medium-impact scenario. impact and 110 in a high impact one, respectively.

For each scenario, the surplus oil revenues were estimated, as well as the tax incentives for the IEPS, and subsequently the difference was calculated to determine the balance and the implications for the country’s public finances.

The results obtained indicate that in the low scenario, the fiscal costs of IEPS incentives would amount to 124 thousand 300 million pesos and oil revenues would add 5 thousand million pesos, with which the result will be a loss of 119 thousand 300 millions of pesos.

While in the high scenario, the fiscal costs would be 452 thousand 600 million pesos and the excess income would add 247 thousand 100 million pesos, which would result in a net loss of 205 thousand 500 million pesos.

“To measure the impact, in the lowest scenario, the amount is similar to the budget that the Ministry of National Defense has for 2022 -just over 104 billion pesos-, while the highest is close to the pension budget. for older adults, which has 226 thousand 500 million pesos”, warned the Imco.

The Institute clarified that these estimates and balance refer only to the impact on public finances and do not take into account opportunity costs, that is, they do not consider whether or not they would have a better alternative use in a destination such as investment in health or education.

Associated costs for the public sector, for example, in electricity generation, are also not taken into account.

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