Economics
Mexico’s Fuel Subsidy Is Costing More Than Oil Export Gains
- Losses from gasoline subsidies are rising as fuel costs grow
- Crude sales windfall less than half subsidy cost for May: BE
The first commercial well of Petroleos Mexicanos (PEMEX) in the town of Ebano, San Luis Potosi state, Mexico, on Tuesday, March 8, 2022.
Photographer: Mauricio Palos/BloombergThis article is for subscribers only.
Mexico’s gasoline and diesel subsidies are now costing the government more than double the extra profit the oil producer gets from higher crude prices, according to estimates by Bloomberg Economics, a sign of the growing burden to keep its cheap domestic fuel plea.
Gasoline and diesel subsidies are expected to total about $2.39 billion during May amid a global fuel price rally, while the windfall from the state-owned oil company’s crude exports is likely to be less than half of that, at $1.04 billion, according to calculations by Bloomberg Economics’s Felipe Hernandez.