The spike in gas prices hits Mexico’s poor the hardest

Residents steal gasoline and diesel from a service station after protests against fuel price hikes in Allende, Veracuz state, Mexico, Jan. 3. (Credit: AP Photo/Erick Herrera)

A sharp rise in the price of gasoline and consequent protests and blockades this week have threatened access to food, transportation and other basic goods and services for Mexico’s poor.

Communities across the country face fuel shortages as the industry struggles amid pipeline thefts, problems with oil refining and pricing at Pemex and speculation over a change to a competitive-pricing model. As a result, stations without gasoline are turning away drivers and long lines are forming stations that do.

Frustrations spiraled into chaos on Jan. 1 after the government-set price of gasoline rose more than 20 percent. Since then, taxis, truckers and other drivers have blocked highways, ports and terminals across the country. Businesses are closed and public access to basic goods, fuel and other services is under threat, according to the Guardian.

At time of publication, officials reported four deaths, the ransacking of at least 300 stores and arrests of more than 700 people.

“I understand the anger and irritation felt by the general public,” Mexican President Enrique Peña Nieto said in a live video address from his official residence Wednesday.

RELATED  Study: Mexico to blame for nearly half of child labor in Latin America

But, he added, the increase was “a necessary measure” as part of a gradual, year-long price liberalization under Mexico’s energy reform. The government expects fuel prices to remain at their current elevated levels until Feb. 3, when private companies begin to import and sell fuel competitively.

Peña Nieto’s administration justified the price increase by pointing to rising international petroleum prices, assuring citizens that keeping gas prices artificially low would mean taking money away from the poorest Mexicans and giving it to those who have the most.

According to Al Jazeera, however, critics say the Mexican government often applies this type of free-market logic in an unbalanced way.

The price increase brought the average price for a liter of premium gasoline to 17.79 pesos (about $0.90), reports AP. The increase makes 4 liters (about a gallon) equal to 80 pesos (about $4) – nearly as much as Mexico’s minimum wage for a day’s work.

“That is the main problem, that people have to find ways to access money … with the same salary they received before,” said Claudia Rosa, a tax attorney at Pepsi in Mexico City, in an interview with Humanosphere.

RELATED  MSF: Countries slam the door on people fleeing violence in Central America

For the moment, Rosa said she has not changed her daily commute. But those who cannot afford the new gas prices will face difficulty getting to work, she added, since many Mexicans’ commutes are too far to make use of bicycles or the subway system.

“Gasoline has become an indispensable expense that we cannot stop using,” she said.

Some analysts expect the move to aggravate inflation as higher fuel costs drive up prices across the economy, particularly in construction and agricultural goods, according to Al Jazeera. The Mexican peso, which had already been struggling throughout 2016, plummeted after President-elect Donald Trump’s election in November.

According to the Guardian, outrage over the economy and recent fuel increase appears to be garnering interest in populist presidential candidate Andrés Manuel López Obrador. The two-time presidential candidate has promised to lower the price of gasoline and electricity, and is currently leading by a large margin in the polls for Mexico’s 2018 election.

Share.

About Author

Lisa Nikolau

Lisa Nikolau is a Madrid-based reporter for Humanosphere, covering gender equality, indigenous rights and poverty in Latin America and worldwide. Find her on Twitter at @lisanikolau, email lisa.nikolau@humanosphere.org or see her latest work at www.lisanikolau.com