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 Editorials | Environmental | November 2006 
Mexico Raises Gas Prices to Pay for Cleaner Fuel
 Anthony Harrup - Associated Press
| Ka-ching! Ka-ching! |
Mexico raised the retail price of premium gasoline and diesel Thursday to cover the cost of producing cleaner burning, ultra-low sulfur fuels, the Treasury Department said.
The introduction of ultra-low sulfur premium gasoline will cost state oil monopoly Petróleos Mexicanos, or Pemex, an additional $195 million a year, and the ultra-low sulfur diesel fuel will cost an additional $258 million a year.
Pemex began distributing the new clean fuels last month and said it plans to invest $3 billion over three years as it extends the sales to the entire country.
Service stations will charge an extra 3 cents a liter plus tax for premium gasoline, or $2.90 a gallon, and 1 cent a liter more for diesel, or $2 a gallon.
At his daily news conference, presidential spokesman Ruben Aguilar said the increases won't be a hardship on Mexico's poor because they don't generally buy premium gasoline.
"This is a tax on the highest sectors of the population that consume this gasoline," Aguilar said. "And in any case it's a marginal cost to improve the environment, which does benefit the whole of society."
Most of the new gasoline is imported, but Pemex said it plans to increase its own production through refinery upgrades. The state company won't introduce any ultra-low sulfur version of its lower-octane magna gasoline until October 2008. Magna costs $2.35 a gallon .
Mexico's gasoline consumption was 710,000 barrels a day in the first three quarters of this year, of which 593,000 barrels per day was magna, and 117,000 barrels per day premium. Diesel consumption averaged 344,000 barrels per day. Total sales of the two fuels were worth about $21 billion.
The country's roughly 7,000 service stations are all Pemex franchises that are privately operated. The retail price of fuels is set by the Treasury Department. |
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