Mexico to spend $25 bln on fuel subsidies in '08
MEXICO CITY, Sept 1 (Reuters) - Mexico's government will spend about $25 billion (260 billion pesos) this year on gasoline subsidies to blunt the effect of inflation on consumers, President Felipe Calderon said on Monday.
The figure was higher than the $19 billion (200 billion pesos) that the government previously said it would spend on fuel subsidies, which have gotten more expensive this year on higher oil prices.
The subsidy means Mexicans are paying about $1 less for a gallon of gasoline than U.S. motorists, and has helped moderate inflation that is running at its highest pace in more than three years.
The Mexican government has long subsidized gasoline, along with diesel and cooking gas, but this year the program could cost more than four times as much as in 2007, after a leap in the cost of the gasoline Mexico imports to cover a refining shortfall.
The government has said a windfall in revenue from crude oil exports will pay for the subsidies, but that it would rather spend that money on infrastructure.
"The total amount for subsidies on gasoline, diesel and liquid petroleum gas would be enough to build four refineries," Calderon said in a report submitted to Congress.
Mexico, via state monopoly Pemex, is the world's No. 6 oil producer and a top supplier of crude oil to the United States. ($1 = 10.3445 pesos) (Reporting by Luis Rojas Mena; writing by Jason Lange, editing by Matthew Lewis)
