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The recent spike in fuel prices that has led to widespread protests throughout Mexico is unfair and severe, since the federal government transfers the entire burden of the hike to the end-consumer instead of implementing a strategy that aims to reduce the tax burden in order to ease the negative effects, says Gustavo de Hoyos, the president of the Employers Confederation of the Mexican Republic (Coparmex), an influential association of Mexican business owners.
“The newly opened fuel market is not a bad thing since it allows the free market to set fuel prices. However, in Mexico, fuel taxes, which are over 40%, are way too high,” he said.
He also said that although the Coparmex supports an open fuel market and the recent energy reforms that allow some private investment, ending more than seven decades of state monopoly over Mexico's oil sector, they're against the fact that the up to 20% increase in fuel prices over the weekend directly affects end-consumers.
In a press statement, the president of the Coparmex urges Mexico's Congress to review and amend Mexico's Special Tax on Products and Services (IEPS) in order to “lessen the effects of the fuel price hike and avoid directly impacting citizens' personal economic situation.”
