The proposal to eliminate tax incentives for the Special Tax on Production and Services (IEPS) applicable to gasoline and diesel starting in 2027 could become “a self-inflicted wound” for the Mexican economy if implemented immediately, warned Marcial Díaz Ibarra, managing partner of Qua Energy Consulting .
The specialist considered that, although the measure would allow the Mexican government to increase its revenue, the fuel market does not yet meet the conditions to withdraw this support mechanism without generating inflationary pressures.
“They will collect more, but the issue of inflation is going to skyrocket and the entire consumption chain will be exposed because they will pass the price on to the consumer,” he stated.
Unlike other voices in the sector that have warned about possible effects on transport companies , Díaz argued that the greatest impact would fall on the entire economy, since the increase in the cost of fuel would end up being passed on to the goods and services consumed by the population.
Therefore, he considered that if the government’s objective is to withdraw the stimulus, the measure should be implemented gradually.
“If you were to schedule a reduction of the IEPS (Special Tax on Production and Services) month by month for the next fiscal year, it sounds much more sensible than doing it all at once because the impact will go directly to inflation,” he explained.
He pointed out that fuel cannot be compared to other products taxed with IEPS, because practically all economic activities depend on it.
“You’re not talking about the IEPS tax on cigarettes or alcohol. We all use fuel. It doesn’t matter your sex, age, or socioeconomic status; we all use fuel,” he emphasized.
In that regard, he warned that eliminating fiscal support would have effects on the entire supply chain .
“It will affect all sectors and prices will skyrocket,” he said.
Díaz acknowledged that companies do face increasing pressure from tax and labor burdens , which has reduced their profit margins.
Finally, he urged people not to take for granted that the elimination of the IEPS incentive will be finalized in 2027, as the proposal still needs to be discussed during the approval process of the Federal Expenditure Budget.
“I don’t know if it will be real or just a media ploy. We’ll see when they schedule the Federal Expenditure Budget in the next legislative session,” he concluded.
It is worth remembering that in the Revenue Waivers 2026 document , the Ministry of Finance and Public Credit (SHCP) proposed ceasing to apply this fiscal mechanism from 2027 onwards under the assumption that international fuel prices will maintain a stable behavior, which would allow for increased tax collection.
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