José Antonio Kast's government issued decrees tweaking the Mepco, allowing historic gasoline and diesel price hikes starting March 26. The move addresses surging oil prices from the Iran war and fiscal tightness, with relief for paraffin and transporters. Congress approved the bill after negotiations exempting SMEs from higher taxes.
On March 25, the Ministry of Finance published decrees in the Official Gazette adjusting Mepco parameters, temporarily neutralizing it. This fully passes on the international oil price surge, with gasoline rising $370 per liter and diesel $580, as Enap forecasts for Thursday, March 26. The tweak shortens the reference price period from 21 to 4 weeks, raising the variable tax component to nearly zero per cubic meter, citing fiscal inability to subsidize further amid weekly costs of US$160 million, per Tomás Bunster, head of Economic Regulation at Finance. Economist Jorge Hermann backed refining Mepco for medium-term fiscal neutrality: “The Mepco has to be perfected (…) it has quite a bit of flexibility to manipulate it,” recalling Mario Marcel's 2022 use costing over US$2 billion to the treasury. In the Lower House, the mitigation bill—lowering paraffin prices and bonuses for taxi drivers and school vans—was saved by DC and PPD votes after pyme impacts were flagged by teams of Jorge Brito (FA) and Daniel Manouchehri (PS). Finance Minister Jorge Quiroz agreed to exempt them from diesel IVA credit limits, following Interior Minister Claudio Alvarado's intervention. Controversy erupted over official “State in bankruptcy” posts, deleted after pushback from Quiroz (“I would never use that word”) and Central Bank President Rosanna Costa, who criticized the term in the March Ipom, forecasting lower growth and higher inflation from the shock. The Comptroller's Office officed Segegob on resource use. Opposition, like Lorena Fries (FA), demands a special session against the “indolence.”
