The winners of the gasoline fiscal stimulus
The owners of cars with the capacity to consume gasoline for their use are the most benefited, because by ceasing to collect the IEPS tax, gasoline does not rise what it should.
“Without fiscal stimuli, the increase would be considerable. It is estimated that regular gasoline would be above 26 pesos per liter on average. Fuels are inelastic products, this means that the behavior of consumption does not change much with price increases”, explained Arturo Carranza, a specialist in
Information from the Center for Public Finance Studies (CEFP).
In Mexico, the main consumers of gasoline are households with the highest per capita income.
The Center for Economic and Budgetary Research (CIEP) indicated that when IEPS collection is negative, the poorest half of families (deciles 1 to 5) benefit from 20% of this negative tax, while the richest half benefits from the remaining 80%.
half board
Treasury gains and loses resources with this type of stimulus.
It wins because the additional incentives, which are going to be granted through VAT and ISR, to importers and refiners, will be under accreditation by the Tax Administration Service (SAT).
“If a company disposes of a product and the SAT says that it did not comply, that it did not do as it should make the declaration, they will not return the money, there will be the decision of whether the company complies so that they give the respective refund. ”, explained Ramses Pech, analyst of the energy and economy industry and partner of Caraiva y Asociados-León & Pech Architects.
Meanwhile, the Treasury loses resources because the amounts that were contemplated and approved at the end of 2021 for IEPS collection in the public budget for 2022 will not materialize, Pech commented.
In the meantime, we will have to wait to see if the excess income that Pemex can obtain from more expensive oil exports is enough to replace missing resources.
“The Treasury says that from there, it will return something for the IEPS, but remember that Pemex does not pay more than 30%-40% of its sales, including duties, taxes, and everything else, so how much money will it receive? be left to Pemex of additional flow? That will be decided by the Treasury”, explained the partner of Caraiva.
Service stations
Meanwhile, service stations remain on the sidelines of the situation, because with the policy that tries to limit price increases, the government has emphasized that service stations preserve their profit margins; profits at reasonable levels, considered Carranza.
Pech considered that the gas stations are kept at a neutral level, since whoever disposes of the product assumes the risk of giving the discount for the purchase of the product, “and for this they must present their declaration to the Treasury; the refiners and everyone else is not giving the discount.”
Carranza added that profits at service stations are more related to higher fuel sales volumes, which have remained stable.
Who loses with the subsidy?
Carriers
Despite the fact that diesel has not been paying IEPS since the last three weeks, the price of this fuel has increased. This is the fuel that has increased its price the most in the international market: 2% from the first week of January to the most recent (which closed on March 25), explained Pech.
These spikes represent a higher cost for the transportation of goods and people, which in the latter case is being absorbed by the carrier because toll prices have not risen, meanwhile, they can increase the prices of services for merchandise movements.
Use of alternative technology
Granting a subsidy to fossil fuels does not disinhibit their consumption, nor CO2 pollution, and may be affecting the use of technologies such as less polluting electric cars, and that use alternative fuels, Carranza commented.