Velazco Oliva: Abolition of electricity subsidies was to make sector attractive to buyers.

MEXICO CITY, Jul 1, 2002 (Diario de Yucatan/Corporate Mexico by Internet Securities, Inc. via COMTEX) -- The elimination of electricity subsidies was a two-pronged initiative, said Cuauhtemoc Velazco Oliva, president of the Special Energy Commission of the Mexico City Legislative Assembly. The idea was to both increase revenue for the federal government and make the sector more attractive to potential buyers, Velazco said. According to him, the federal government obtained 12.6 billion pesos (US$1.3 billion) in extra funds by eliminating the subsidy. Although the government insisted the subsidy cut would affect only large consumers of electricity, Velazco said the burden fell to small and medium-sized users. As an example, he said residential consumers in the Mexico City area using 200 kilowatts per month saw an 81% increase in their electricity rates.

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