MEXICO CITY, Oct 28 (Reuters) - Mexican Senate committees on Wednesday agreed to eliminate a proposed tax cut on sugar-sweetened drinks which critics had said would hinder the fight against obesity in Latin America's second-largest economy.
Mexicans are among the world's biggest drinkers of sodas made by companies like Coca-Cola Co and PepsiCo Inc , and in 2013, the country became the first major market to tax high-calorie soft drinks, by 1 peso ($0.06) per liter.
Last week, the lower house of Congress, where the ruling Institutional Revolutionary Party (PRI) and its allies have a majority, approved plans to cut by 50 percent taxes on soft drinks with less than 5 grams of added sugar per 100 ml.
However, in the Senate, where the PRI is short of a majority, the finance committee and one other panel voted to strip the planned cut from the 2016 budget package.
The legislation must still be voted on the Senate floor and returned to the lower house. But Senators from the PRI and the two main opposition parties, speaking on condition of anonymity, told Reuters that the proposed cut was now off the agenda.
Mexico has one of the highest obesity rates in the world, with nearly two-thirds of the population considered obese or overweight, according to the World Health Organization.
The Senate committees also proposed that fuel prices, for which the government has set upper or lower limits, will in future be allowed to fluctuate in a range linked to inflation. (Reporting by Dave Graham)