AMLO and Morena political grandstanding leads to fiscal disaster

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The 400,000 million pesos that the AMLO government will allocate to contain the price of gasoline is also equivalent to 87% of the budgets for Security and Education this year.

The option of the government of Andrés Manuel López Obrador to subsidize the price of gasoline has a very high cost that is equivalent to the construction of a refinery like the ‘Olmeca’ of Dos Bocas and the Mayan Train together, and even represents the expenses of the federal ‘star’ programs of economic support, such as pensions for the elderly, Sembrando Vida and the Benito Juárez scholarships.

This Wednesday, the head of the SAT, Raquel Buenrostro, warned that Mexico will lose about 400,000 million pesos (mdp) due to subsidies for gasoline consumption this year, given the rebound in international oil prices and its derivatives.

Only due to the fact of ceasing to collect the Special Tax on Production and Services (IEPS), it is estimated that the Tax Administration Service (SAT) will not be able to collect 200,000 million pesos this 2022.


While, due to the additional incentives given to importers and refiners through verification of VAT and ISR, a cost to the treasury of 13,000 million pesos per month is estimated.

Due to these fiscal stimuli, public income from tax collection this year will be below the goal, but this will be offset by higher income from Pemex.

“At the government level and at the level of public finances, we are going to come up with tables, there is not going to be any macroeconomic effect, everything that we are subsidizing is what Pemex is obtaining for more income, because the price of crude oil is high,” said the head of the SAT.

Specialists consulted by Expansión have expressed that the fuel subsidy mostly helps people with the highest income in the country, and to a lesser extent the population with the lowest income, in addition to the fact that granting subsidies threatens the budget of other programs and projects. of public investment.

Gasoline subsidies will cost the same as AMLO programs and projects

Cost of subsidy is equivalent to Dos Bocas refineries and Tren Maya

The original budget to build the ‘Olmeca’ refinery, in Dos Bocas, Tabasco, was 8.9 billion dollars, according to Pemex calculations; that is, almost 180,000 million pesos.

While the budget that would be allocated to the original plan for the Mayan Train was 120,000 million pesos, it has increased to 230,000 million pesos.

Together, according to the original plan of the López Obrador government, these “strategic” projects would cost the country 300,000 million pesos.

The cost of construction of the Dos Bocas refinery has also risen and, according to Bloomberg calculations, it will end at 250,000 million pesos.

Together, the projects will cost 480,000 million pesos, that is, 80,000 million pesos more than the fuel subsidies.

‘Star’ programs

The budget to deliver the resources in 2022 for five priority programs of the current government totals 366,242 million pesos, this is equivalent to 92% of what the gasoline subsidies will cost.

The programs are Pension for the Welfare of Older Adults, for which it is estimated that 238,014 million pesos will be spent; the Benito Juárez Basic Education for Welfare Scholarship Program for 67,710 million pesos; Sowing Life for 29,903 million pesos; Pension for the Welfare of Persons with Permanent Disabilities for 20,037 million pesos and Young People Writing the Future for 10,583 million pesos, according to the 2023 Economic Precriteria of the Treasury.

Regarding the debt

The 400,000 million pesos that will not be collected in 2022 are equivalent to 67% of the financial cost of the public debt for this year, estimated at 580,638 million pesos.

In addition, the subsidy represents 18% of the total net public spending approved for 2022.

Safety and education

The sum of the budgets for this year for Public Education and Public Safety reaches 457,979 million pesos, the cost of the subsidy represents 87.3% of these two budgets, detailed figures from the Treasury.

Source: expansion.mx

Mexico Daily Post