Aug. 13 (Bloomberg) -- Mexico's government plans to draft its 2009 budget with the assumption exported oil will sell for $80 a barrel, more than $30 higher than this year's budgeted price, Mexican Finance Minister Agustin Carstens said.

Global oil prices are unlikely to drop below $80 a barrel even though they may fall from their current levels, Carstens said. The volume of Mexico's oil exports and production this year have been ``significantly'' less than expected, he said.

``We're going to have a price of $80 with the risk of falling prices,'' Carstens told lawmakers today at a meeting in Guadalajara, Mexico. ``If production falls, that's another risk.''

Higher global prices helped Mexico collect over-budget oil revenue in the first half of the year even after the government posted a first-quarter shortfall on falling production at the state oil monopoly, higher costs for gasoline imports and an unfavorable exchange rate.

The central bank's decision to raise interest rates for two straight months to 8 percent has caused the peso to appreciate against the dollar, making Mexico's oil exports less profitable, Carstens said.

President Felipe Calderon plans to propose about a 4.5 percent increase in public spending for next year's budget, Carstens said. This year's budget called for a 9.8 percent increase in total spending adjusted for inflation and assumed Mexico would get $49 a barrel in oil revenue.

Gasoline Subsidies

Mexico has no plan to change its gasoline subsidy policy, Carstens said. Central Bank Governor Guillermo Ortiz has said in recent weeks that the country will gradually reduce fuel subsidies until they are in line with international prices. The government hasn't confirmed such a plan.

Inflation won't quicken ``much more'' and will begin to slow within six months, Carstens said. He added that inflation isn't ``out of control.''

Consumer prices climbed 5.39 percent in July from a year earlier, driven by higher costs for food and gasoline. It was the sixth straight month inflation accelerated.

The government expects electricity prices to fall by the end of the year, Carstens said. Costs have risen this year on the growing expense of natural gas prices, he said.

Electricity Prices

``We expect a reduction in the price of electricity by the end of the year that could be significant,'' Carstens said.

Carstens also said the economic slowdown in the U.S. had affected Mexico ``somewhat,'' but hasn't had a major impact. Slower growth will affect Mexico's tax collection in 2009, he said.

Petroleos Mexicanos, the state-owned oil company, may produce 2.85 million barrels a day of crude oil next year, Carstens said. Factors that led to a decline in output this year have been ``stabilized,'' he said.

The central bank lowered its 2008 growth forecast last month for a third time this year to 2.25 to 2.75 percent from 2.4 to 2.9 percent.

To contact the reporters on this story: Adriana Lopez Caraveo in Guadalajara, Mexico at adrianalopez@bloomberg.net; Jens Erik Gould in Mexico City at jgould9@bloomberg.net

Last Updated: August 13, 2008 17:44 EDT