Mexicans faced a double whammy this week, with increases in the costs of both gasoline and electricity.
While the gasoline hike will hit everyone equally, the electricity increase will only impact high-end users, or those with alto consumo bills.
The second gasoline hike of the year went into effect at the pumps Monday, August 1 with Magna jumping by 56 centavos to 13.96 pesos a liter, a raise of 4.2 percent.
This is the highest single gasoline increase for 18 years.
Meanwhile, Premium gas rose by 44 centavos to 14.81 pesos a liter and diesel by 21 centavos to 13.98 pesos.
This is the second month in a row that gasoline prices have risen. The cost of gasoline has increased by six percent so far this year, twice the rate of inflation.
At the end of last year, the Mexican Congress approved a system that sees pump prices fluctuate in tune with “international oil prices” inside a “band” that will allow maximum hikes or decreases of three percent in either direction over a one-year period.
The price of gas is now almost three percent higher than in August last year, meaning that the upper limit has been reached and that further hikes this year are unlikely, government sources say.
The effect of August’s hike is likely to impact inflation since most foodstuffs and goods within Mexico are moved by road.
Meanwhile, the Comisión Federal de Electricidad (CFE) announced hikes for high-end consumers, businesses and industry of between 2.5 and 3.2 percent.
The cost of electricity for alto consumo users has increased by 8.9 percent in the past 12 months, while the figure is between 7.2 and 9 percent in the commercial sector.
The 90 percent of households who fall into the bajo consumo category will see no change to their bills.