MEXICO CITY, Jan 2 (Reuters) - Mexico’s government said on Friday that its latest “gasolinazo,” or gasoline price spike, will be the only increase this year.
The fuel price hike in the world’s 10th biggest crude producer comes as slumping international oil prices have led to dramatically shrinking gasoline and diesel costs in countries where market forces determine prices, such as the United States.
The finance ministry’s announcement that prices would remain stable in 2015 follows government-set fuel and power price hikes announced quietly on Thursday, both at about 2 percent, which will hit nearly all motorists and residential power users.
Mexico’s government determines fuel prices and will continue to do so until a sweeping energy reform finalized last year opens up the retail fuel market in 2017.
The new government-set maximum price for the top-selling gasoline grade sold by state-owned oil company Pemex is about $3.46 per gallon, or 1.9 percent up from December.
That compares to an average of about $2.30 per gallon in the United States, according to data from the U.S. Energy Information Agency (EIA), or about one third more expensive.
Meanwhile, the residential electricity rate faced by more than 9 out of 10 Mexicans rose 2.1 percent on New Year’s Day to about $0.0546 per kilowatt/hour (k/h).
Like fuel, power rates in Mexico are set by the government, which said the Jan. 1 hike would also be the only one in 2015.
It noted that the energy price hikes for 2015 both fall below the central bank’s inflation target of 3 percent.
President Enrique Pena Nieto’s 2013 energy reform, which ended decades-long oil and power monopolies, was largely sold on the promise of lower electricity costs over the next few years.
The latest EIA data show that average U.S. residential power rates stand about $0.1258 per k/h, or about 57 percent higher than the government-subsidized rate in Mexico.
Mexico also announced a nearly 7 percent cut to base industrial power rates, which have long been significantly higher than average prices faced by U.S. industrial users.
The new industrial electricity rate in Mexico is about $0.0590 per k/h, according to state-run national electricity company CFE, compared to $0.0634 per k/h in December. (Reporting by David Alire Garcia; Editing by Bernard Orr)