Mexico Gas Prices Jump as Fuel Subsidy Ends Saturday

Mexico City, Mexico — The Mexican Ministry of Finance and Public Credit (SHCP) has confirmed the complete elimination of the fiscal stimulus for the IEPS (Special Tax on Production and Services) applied to gasoline and diesel, effective Saturday, August 2. The announcement, published in the Official Gazette of the Federation (DOF), marks the seventeenth consecutive week without fuel subsidies, directly impacting Mexican drivers' wallets.

Full IEPS Tax Now in Effect

With the removal of the stimulus, consumers will now pay the full IEPS tax, which amounts to 6.45 pesos per liter for Magna gasoline. This means drivers could spend an additional 100 to 200 pesos per full tank, depending on vehicle type and tank capacity.

No subsidies remain for Premium gasoline or diesel—primarily used in freight transport and services—meaning the full corresponding tax will also apply to these fuels.

Current Fuel Prices in Mexico (August 2025)

According to PetroIntelligence, the national average prices as of August 1 are:

• Regular gasoline (Magna): $23.61 per liter
• Premium gasoline: $25.64 per liter
• Diesel: $26.31 per liter

Prices may rise further as gas stations fully implement the unsubsidized IEPS tax.

Impact on Transportation and Household Economies

The freight and distribution sector is among the hardest hit by the subsidy removal, as diesel is essential for operations. This could lead to increased distribution costs, potentially raising prices for basic goods.

Additionally, daily commuters may see significant increases in their monthly fuel expenses.

Why Was the Fiscal Stimulus Removed?

While the SHCP did not explicitly state its reasons in the DOF, the decision aligns with budget adjustments, fiscal pressures, and a government trend toward reducing energy subsidies. It also coincides with declining global oil prices, which may have provided an opportunity to apply the full tax without an immediate extreme price hike domestically.

Global Oil Price Trends

On Friday, August 2, global crude prices fell, raising demand concerns:

• Brent crude dropped $2.03 (-2.83%), closing at $69.67 per barrel.
• WTI crude declined $1.93 (-2.79%), closing at $67.33 per barrel.

Despite this, both saw weekly gains of nearly 6%, driven by expectations of an OPEC+ agreement to increase production in September.

What to Expect in Coming Days

Gasoline prices are expected to continue rising, especially if the dollar strengthens or oil prices rebound. If the SHCP maintains its no-subsidy policy, Mexican consumers will face higher energy costs throughout the summer.

A New Fiscal Phase

This decision is part of broader fiscal measures reflecting the federal government’s strategy to increase revenue without altering base taxes. The full reinstatement of the IEPS tax not only raises consumer prices but also poses economic challenges for millions of Mexican families amid persistent inflation and stagnant wages.