Mexico's President Claudia Sheinbaum assured on Monday that gasoline prices will not rise in the country, despite growing fears that the war in Iran could trigger an energy crisis. She explained that this will be possible thanks to a mechanism put in place by former President Andrés Manuel López Obrador (2018-2024). «If the price of gasoline, its production, or its importation increases, there is a mechanism through the reduction of the IEPS (Special Tax on Production and Services) so that the price of gasoline does not increase in our country,» she declared at her daily press conference. The IEPS is the levy applied to fuels, which the government has used in recent years as a stabilization mechanism, reducing or subsidizing it when international prices skyrocket. Sheinbaum recalled that this mechanism was activated by López Obrador in 2022 when «prices increased due to the war in Ukraine.» She reported that on Monday she will meet with officials from the Ministry of Finance to address this issue and «if necessary» they will use this protection mechanism to avoid a rise in gasoline prices. Amid the worsening of the conflict, international concern in the oil market has grown due to export problems from the Persian Gulf, as Iran has imposed a de facto closure of the Strait of Hormuz, through which typically flows one-fifth of the world's hydrocarbons. Intermediate Texas oil (WTI) soared 12% this Monday to $101.88 a barrel, as investors brace for the economic consequences of the U.S. war with Iran.
