High tax impact on Magna gasoline: over 40% of the price is made up of taxes

More than 40% of the price of Magna gasoline consists of taxes Mexicans face a high tax burden when it comes to purchasing Magna gasoline. In February 2018, the tax burden for this fuel was 29.52% of the price at stations, with a subsidy greater than the federal IEPS fee at that time. However, in the week of May 13-19, 2024, the average price of green gasoline at stations reached 24.25 pesos, of which more than 40% correspond to taxes. Consumers pay around 10.05 pesos in taxes per liter of Magna gasoline, representing a high tax burden. During the mentioned week, the price of Magna gasoline included four tax concepts: three types of fees for the Special Tax on Production and Services (IEPS) - federal, state, and for CO2 emissions - in addition to the Value Added Tax (VAT). The federal IEPS was the concept with the highest amount, despite having a subsidy or discount on its fee during five days of the week. The unsubsidized fee for Magna gasoline is 6.17 pesos per liter, but due to the variability of prices in the international oil market, the Treasury Department offers discounts on this fee. For example, from Monday, May 13 to Friday, May 17, the fee was 6.08 pesos per liter, according to official information. These discounts aim to cushion the impact of increases in oil prices, especially those coming from the United States, Mexico's main fuel supplier. It is important to highlight that IEPS fees change weekly and are published in the Official Gazette of the Federation. These fees have a set limit amount each year in December and apply for the following year. In addition to taxes, other costs contributing to the price of gasoline include those related to refining, crude oil, and logistical costs. The tax burden has increased compared to 2018, when crude oil and its derivatives experienced significant increases. Back then, the tax burden represented 29.52% of the final gasoline price, with a greater subsidy on the federal IEPS fee. Now, in 2024, the tax burden is higher and the revenue of the Ministry of Finance has increased, as fiscal supports or discounts on the IEPS fee have been reduced. During the first five months of 2024, revenue from IEPS on gasoline amounted to 161.326 billion pesos, more than half of what was collected during the entire year 2023. This increased revenue is due to the Treasury Department reducing or even freezing fiscal supports, charging the IEPS at 100%, and the stability in fuel prices. Mexicans continue to feel the impact of a high tax burden when purchasing Magna gasoline, reflecting the importance of analyzing and understanding the tax structure in this crucial sector for the country's economy.