Mid-East drone attack won’t affect gasoline prices: AMLO

September 17, 2019

Prices will remain stable, president says.

The drone attack on oil installations in Saudi Arabia won’t affect gasoline prices in Mexico, President López Obrador said on Tuesday.

“. . . Despite the upward adjustments to crude prices . . . we’re protected and I can say to Mexicans that there will not be variations in gasoline prices, we’re going to continue to maintain the commitment that fuel prices won’t go up in real terms,” López Obrador told reporters at his morning news conference.

The price of WTI crude rose 14.7% to US $62.90 per barrel on Monday two days after Saturday’s pre-dawn attack on facilities owned by Saudi Aramco, the Middle East nation’s state-owned oil company.

The coordinated strikes on the company’s facilities disrupted about half of Saudi Arabia’s oil capacity, or 5% of daily global supply. Authorities were forced to cut oil output by 5.7 million barrels per day as a result of the attack, for which Yemen’s Houthi rebels claimed responsibility.

Ricardo Sheffield Padilla, head of the consumer protection agency Profeco, explained that prices at gas stations in Mexico will remain stable because the Secretariat of Finance (SHCP) has the power to increase or decrease gasoline subsidies and a stimulus scheme that is designed to alleviate the burden of the IEPS excise tax applied to each liter of fuel.

López Obrador said that officials from the SHCP and the state oil company Pemex will meet today to discuss the situation in the Middle East and its effect on petroleum prices.

“. . . On the one hand, the price increase benefits us because we sell crude oil abroad but as we are buyers of [foreign] gasoline and diesel, it can [also] harm us,” he said.