| | |  News Around the Republic of Mexico | August 2008 
Era of Cheap Gas Ending in Mexico?
 Jeremy Schwartz - Arizona Statesman
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Mexico’s honeymoon with subsidized gasoline may be coming to an end, according to Mexican officals. Mexico pays just $2.76 per gallon of gas and $2.35 for a gallon of diesel, thanks to government subsidies. The Calderon administration wants to slowly, but surely, raise gasoline prices until they are on par with international (read American) prices within two years, the Mexican press is reporting.
Mexico is the world’s sixth largest oil producer, but because it lacks enough refineries, actually imports about 40 percent of its gasoline from the United States at what have been record market prices. The government has blamed a combination of high importation costs, the gasoline subsidies at the pumps and an alarming decline in oil production for wiping out what experts say should be windfall oil profits.
A hike in gas prices should also put an end to the border crossings by American drivers seeking a relief from high prices in the U.S. Many Mexican border towns have reported gasoline and diesel shortages because of the cross border traffic. Officials in Ciudad Acuna recently began fining American drivers who fill up extra tanks or drums with the cheap Mexican diesel.
Ironically, Mexican gasoline prices, which are set by the government, had been higher than U.S. prices for years, leading to much grumbling on this side of the border until the world oil prices skyrocketed |
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