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MEXICO CITY (Reuters) - Mexico will continueraising domestic fuel prices to eliminate costly subsidies,Finance Minister Ernesto Cordero said Thursday as he pushedan austerity plan that opposition lawmakers promise to fight.

Mexico has been lifting fuel prices since mid-2009 to cutlosses on fuel sales by state oil monopoly Pemex asthe country recovers from a deep economic downturn.

Mexican drivers enjoy subsidies that in July had thempaying roughly 10 percent less to fuel their cars than U.S.consumers do. Heating and cooking fuel also get price support.

"The economic crisis is over and we are in the process ofreducing the gasoline subsidies," Cordero told a newsconference the day after presenting the government's 2011budget proposal.

Mexico has so far this year effectively subsidized domesticfuel by $2.7 billion and is due to offer $1.3 billion insubsidies next year.

Prices in 2011 will remain below international levels, thefinance ministry has said.

Fuel subsidies are just one of several contentious issuesthat lawmakers must resolve as they debate changes to thebudget plan outlined by President Felipe Calderon.

Opposition lawmakers want to turn back tax increases set inthe 2010 budget and the next few weeks are likely to be full oflively debate as party leaders stake out their position on thebudget while positioning themselves ahead of 2012 nationalelections.

Specifically, opposition lawmakers want to repealCalderon's hard-won tax hike included in the 2010 budget, whichlifted the consumption tax to 16 percent from 15 percent.

Calderon's conservative National Action Party has warnedthat Mexico, which has a tax take on par with Sierra Leone andrelies on dwindling oil exports for about a third of governmentrevenues, must broaden its tax base. (Reporting by Luis Rojas and Miguel Angel Gutierrez; Writingby Patrick Rucker; Editing by James Dalgleish)