Mexico's finance ministry said on Tuesday local gasoline prices will rise by as much as 20.1 percent from January 1 as part of a fuel sector liberalisation program that seeks to end years of government-set pump prices. In a statement, the ministry said the widely used Magna gasoline brand will rise 14.2 percent and will sell at an average price of 15.99 pesos (78 cents) per liter at retail, while the Premium fuel will go up 20.1 percent to an average of 17.79 pesos per liter.

Diesel will rise 16.5 percent, with an average price of 17.05 pesos per liter. The ministry said it would set a maximum gasoline price through February 3. After that, the maximum price will be set bi-weekly, until February 18, when it will be set daily. Earlier this month, the energy regulatory commission said a staggered fuel price liberalisation will begin at the end of March and extend through the rest of 2017.

The move will phase out government-set gasoline prices, a practice that has prevailed in Mexico for decades, and replace them with market prices. The change is one of the most tangible parts of a landmark energy reform program in Mexico, which in 2013 ended the 75-year monopoly of state oil company Pemex over nearly all facets of the sector, from crude production to retail fuel sales. In April, Mexico allowed private companies to import fuels for the first time, nine months ahead of what the energy reform program originally stipulated.

Copyright Reuters, 2016