Mexico to raise petrol prices

The Mexican government is gearing up to switch to market-set petrol prices in 2017, starting with an increase in fuel retail prices, effective January 1.

Announced by the government late on Tuesday, consumers will see an increase in the price of regular petrol of some 14% at the start of the new year, with premium fuel expected to go up by 20%. The price of diesel will be increased by about 17%.

The measure, which marks and end to some 80 years of government-controlled fuel prices, will be enacted in Baja California and Sonara first. The rest of the country will follow suit throughout the year. Price controls will be scrapped in Mexico City in November. Regions currently grappling with fuel shortages, such as Puebla and Tlaxcala, will transition last.

“What we can’t have is a market where for different reasons we keep the price artificially high or artificially low,” Finance Minister José Antonio Meade said during a radio interview. By the end of 2017, analysts and traders expect average fuel prices to be more than 20% higher than the year before.