The Mexican government is subsidizing fuel to contain price hikes triggered by the war in the Middle East. The cost of oil and fertilizers has risen by over 60% in 45 days of conflict, leading to an increase in the price of gasoline imported by Mexico. To prevent prices from skyrocketing, the government is subsidizing the IEPS (Special Tax on Production and Services), which can cover up to 100% of this levy. According to the Mexican Institute of Finance Executives (IMEF), this creates a hole in public finances of five billion pesos per week. If oil prices remain at $100 per barrel, this support would rise to six billion pesos weekly. If the conflict lasts six months, the government would lose 156 billion pesos, and if it continues until the end of the year, the deficit would exceed 220 billion pesos—half of what the government earned from this tax in 2025. 'The government is injecting billions every week to contain the rise in energy prices detonated by the war in the Middle East… but the cost keeps growing,' the IMEF concluded.
