Big shot against Mexico

National/ economy

Increases to the gasoline and with losses of the 86% by wastage in the exchange volatility

Big Shot: Mexican Gas

By: Carlos Damián                       July 28, 2016

The Magna gas will rise 56 cents by liter, Premium 44 and the diesel 21 cents: Treasure

México.-The gasoline will return to increase in August and also will rise the price that had the fuel that had the diesel of January to July (2016), the Secretary of Estate and Public Credit (SHCP, for their initials in Spanish) announced. The increases will impel the inflation, warned at the same time the Stock Exchange Finamex. The Magna type gas, the most consumed in the country. It will be sold to 13.96 pesos (69 pennies) for liter from Monday (August 1, 16), that is to say, 56 cents (MX peso) for liter more than in July, and 80 cents up of the price that preserved during the first semester of the year,  since Augusts will be the second consecutive month of the year in which increase.  At the same time, the gasoline type Premium gas will cost the next month 14.81 pesos (74 pennies) by liter, 44 cents more than the current price, what represents their fourth monthly increase of 2016. In so much, for the first time in this year the diesel upon going from 13.77 pesos by liter to 13.98 (70 pennies), that is to say 21 cents more. When it began 2016 the prices of the Magna and Premium gas decreased of price for the first time in the history of the country, fact weighted by the federal government in the wake of the energetic reform. However the accrued increases of such flammable this year already duplicate the reduction of price applied from January:  as of the next week the Magna gas will be of 80 cents more expensive with respect to 13.16 pesos in what was sold in the first month of the year, which implied a reduction of 41 cents with respect to 2015. The Premium gas will be sold 83 cents up above of 13.98 cents for January liter, when was applied a reduction of 43 cents. The Stock Exchange Finamex calculates that the "impact waited in the national consumer prices index (INPC, for their initials in Spanish) is of 0.21 percent" and anticipated that for final of year the Magna gas will cost 13.98 and Premium gas 14.81 pesos by liter. The increase in the gasoline has indirect effects in transportation costs and the commodities, since most of praises goods that are consumed in Mexico are moved by highway. Finamex considered that by this cause would adjust their inflation forecast of 3.2 percent that calculated for final of 2016. The previous analysis prophesied that "the ghost of the inflation" is shown in the INPC by the increase that there was from July in the gasoline and the one which already was anticipated of 4 percent for August, according to the formulation established to calculate the increases as of the international reference prices of the energetic. The increase in the Magna gas in August will be of 4.17 percent, in comparison with July, according to the Estate data, but in annual terms is of 3 percent, with what is located in the maximum level labeled by the Congress of the Union for this year, related to the international prices but in a band whose oscillation only it will be of more or less than 3 percent. Estate justified the increases by the "sharp point" of the international prices of the fuels, which in their opinion reflects a recovery in the price of the crude. Nevertheless, it insisted that on what is going of the flammable said year are sold more inexpensive than the last year. "With respect to observed what is in August of the last year, the prices for August 2016 will be greater in 3 percent the case of both gasoline, while the price of the diesel will be smaller in 1.5 percent. Fit point out that during the period of January - August the average prices of the Magna gas and Premium gas and of the diesel continue measuring smaller to the price observed  in 2015 in 2.1 percent, 1.8 percent and 2.8 percent, respectively", according to calculations of the financial group. With the same methodology we calculate that as of August the final prices to the both gasoline consumer stay in the limit superior "of the band most/less 3 percent on the price of December of 2015. However, to December of this said year prices would accumulate a pent-up inflation of 5.5 and 4.2 percent, respectively for the Magna and the Premium gas". Pemex with losses in the first semester of 2016 The nonproducing organization of the state (Pemex for their initials in Spanish) reported losses accumulated by 7 thousand 693 million of dollars during the first semester of the year, in spite the announced resources injection last April and due to the devaluation of the peso. The petroleum enterprise of the state it continued "operating under an adverse prices environment as a company restructured, under the fiscal regime updated through the introduction of the support announced by the federal government", indicated upon making known the financial drawing-rooms to the June close. Practically 86.5 percent of the losses are explained in the exchange rate. According to a report sent to the Mexican Values Bag, the loss on the other hand rose 177.8 percent to the close of the first semester to a total of 6 thousand 299 million 750 dollars. The factors that impacted to Pemex of meaningful way were the underprice of the hydrocarbons, the devaluation of the front weight to the American dollar, as well as the change of the interest rates of the governmental bonds, according to Pemex. Affirmed that the dollar had an average rate of 18.91 pesos in the second trimester, while in equal lapse of 2015 was of 15.57 pesos, what is mean, a difference of 21.4 percent. Only in the second trimester of year the losses of one of the greater companies of the world ascended to 4 thousand 173 million of dollars.  Pemex informed that the total sales in the second trimester, that include crude oil exports and the sale of gasoline in the country, were located in 255 thousand 709 million of weights, 17.2 percent less as compared to the April income - June of 2015. The fall was sponsored by the reduction in the sales in Mexico of gasoline and diesel, as well as of liquefied gas of oil (LP for their initials in Spanish). The company explained, that the gasoline and diesel sales fell 19 percent in the reference lapse by the variation in the prices, in spite of a light increase in the volume. At the same time the gas sales LP were reduced in 40.1 percent to 7 thousand 400 million of pesos. "Additionally, the sales were seen affected negatively by a change in the calculation mechanics of the reference prices for effects of the special tax on production and services (IEPS for their initials in Spanish), that now considers five months of said price quotes" abounded Pemex. At the same time, Juan Pablo corporative directing Newman of Finances, said that Pemex it has paid 103 billion of pesos as part of the indebtedness by provide companies. Those resources were trustworthy to almost 95 percent of the total of the creditors and was covered 70 per cent of the original debt. Thus the passive total of Pemex ascended to almost 185 billion of dollars to the close of the first semester, which meant an increase of 12.6 percent.  There is no dismissals but if the pensioned leave will not be occupied such posts Pemex informed that to them clipping  in the form of punishment that they have prescribed to them the deputies of 100 billion of pesos to the company of the State does not imply bid farewell it of personnel, and that the fall in the income will be faced with the greater productivity of  the existing occupational insole (La Jornada, politica, p.p. 20-21, July 29, 16)