Gas prices creep up as fuel subsidies reduced for second consecutive week

The Mexican Finance Ministry (SHCP) has announced a further reduction in fuel subsidies, leading to continuing high prices for gasoline and diesel in Mexico.

For a second consecutive week, the SHCP has reduced a federal fuel subsidy used to offset the IEPS excise tax, , the SHCP said, resulting in an increase in gas prices.

Mexico’s largest carrier, Fuel costs represent about 35% of operating costs at Volaris, Mexico’s largest air carrier. The company has seen shares fall 25% this year. (CC BY-SA 4.0)

Subsidies on “Magna” — premium fuel — have reduced from 53.3% to 47.2%, while regular gasoline has gone from 31.9% to 26.1%. Diesel saw the smallest drop in support, down 0.9% to 57.15%.

As a result, the average price of regular gasoline will reach 22.36 per liter, down slightly from the all-time high of 22.41 between Sept. 15 to 18. Premium gasoline — greater than 91 octane — will cost 24.65 per liter, according to industry consultants PETROIntelligence.

Higher fuel prices have presented challenges to Mexican businesses. Low-cost airline Volaris, Mexico’s largest carrier, has seen shares fall 25% this year. Fuel costs represent around 35% of all operating costs at the airline according to company reports.

Transportation firms Grupo México Transportes and Traxión have also seen costs rise in line with fuel prices, although unlike Volaris, this has not had a negative impact on share price.

A red train painted with the word "Ferromex" on a track.
Higher fuel prices have impacted transportation businesses like Ferromex, owned by Grupo México Transportes. (Wikipedia CC BY-SA 3.0)

IEPS is paid on every liter purchased by consumers, and to avoid volatile prices, the SHCP establishes a fixed price every week, based on the international oil market and logistical costs. Current prices will remain in effect until Oct. 6, when the SHCP will review the subsidies once again.

The rise in gasoline prices comes as a result of global supply issues after major producers Saudi Arabia and Russia reduced their output.

With reports by Milenio and El Economista

Have something to say? Paid Subscribers get all access to make & read comments.
fans blow horns and wave mexican flags below the Angel of Independence monument in Mexico City after Mexico's World Cup win against south africa

Mexico’s week in review: World Cup opener brings victory for Mexico amid protests and trade tensions

0
Mexico kicked off its third World Cup with a home-turf win, as leaders sought to contain a tense standoff with striking teachers and fresh uncertainty over the USMCA's future.
A natural gas pipeline (fracking concept)

The time is now for Mexico to go all in on fracking: A perspective from our CEO

20
Mexico sits on a geologic formation similar to the Permian Basin — yet produces 100 times less. MND's CEO makes the case for fracking as a historic economic opportunity.
For Mexico's searching mothers, the inaugural match of the 2026 FIFA World Cup was an important opportunity to keep the country's crisis of disappearances front and center.

‘All eyes are on the World Cup’: How Mexico’s searching mothers are seizing the tournament to fight for the disappeared

1
Protesters packed southern Mexico City on the first day of the 2026 FIFA World Cup, drowning out the celebrations with a reminder that behind the spectacle, tens of thousands of families are still searching for their missing loved ones.
BETA Version - Powered by Perplexity