(Adds analyst quote on inflation)
MEXICO CITY Dec 27 Mexican gasoline prices will
rise by as much as 20.1 percent next month compared to the
highest recorded prices in December, the government said on
Tuesday, as part of a program to end years of government-set
prices at the pump.
In a statement, the finance ministry said the widely used
Magna gasoline brand will rise 14.2 percent and will sell at an
average price of 15.99 pesos (78 cents) per liter at retail,
while Premium fuel will go up 20.1 percent to an average of
17.79 pesos per liter.
Diesel will rise 16.5 percent, with an average price of
17.05 pesos per liter.
The ministry's price ceilings will be in effect through Feb.
3. After that, the maximum price will be set bi-weekly, until
Feb. 18, when it will be set daily.
"It's an important change," Finance Minister Jose Antonio
Meade said in a local radio interview. "It's a change that will
allow prices to reflect costs, and avoid artificial
Analysts said the liberalization program was likely to have
an impact on inflation, which has already passed the central
bank's 3 percent target due to a sharp peso depreciation.
"This is a positive in the long term, but even so, in the
very short term, clearly these (price) rises ... will result in
inflationary pressures for consumers throughout 2017, and we'll
see a deceleration of internal demand," said Alejandro
Cervantes, an economist at bank Banorte.
Earlier this month, the energy regulatory commission said a
staggered fuel price liberalization will begin at the end of
March and extend through the rest of 2017.
The move will phase out government-set gasoline prices, a
practice that has prevailed in Mexico for decades, and replace
them with market prices.
The change is one of the most tangible parts of a landmark
energy reform program in Mexico, which in 2013 ended the 75-year
monopoly of state oil company Pemex over nearly all facets of
the sector, from crude production to retail fuel sales.
In April, Mexico allowed private companies to import fuels
for the first time, nine months ahead of what the energy reform
program originally stipulated.
The reforms also paved the way for private companies to
establish their own non-Pemex branded gas stations for the first
time since the 1930s. That began earlier this year.
Gasoline prices in Mexico are higher than in the United
States, where market prices prevail, and Pemex loses about $3
billion a year importing gasoline into Mexico, according to
Nomura analyst Benito Berber.
($1 = 20.6065 pesos)
(Reporting by Gabriel Stargardter and Veronica Gomez;
Additional reporting by Paulina Osorio; Editing by Jeffrey
Benkoe and Alistair Bell)