Gasoline Price Hike in Mexican New Year

"Costs are going to increase more rapidly than last year," - Javier Altamirano, president of the National Association of Private Transport

(LAS CRUCES, NM) - The last scenes of Guadalupe Reyes are playing out in Mexico. A popular nickname for the holiday celebrations that commence on December 12, Virign of Guadalupe Day, and culminate on January 6, Three King's Day, the season is wrapping up with last-minute romps on the beach, samplings of the traditional rosca cake and plenty of toy giveaways to excited children.

And as Mexicans return to work and school, they will find that driving costs will take more of a bite out of their pocketbooks this year.

On January 5, the price of regular, premium and diesel fuel increased by a little less than a penny a liter, which works out to just under four cents per U.S. gallon. Announced by a federal Taxation and Revenue Secretariat official at a holiday weekend press conference, the price hike came after a reduction in federal gas subsidies, which amounted to approximately $20 billion last year.

The increase means that Mexican drivers will now pay 10 to 17 percent more for fuel than their U.S. counterparts, despite Mexico's status as an oil exporter to its northern neigbor. Coming on top of previous price jumps in 2012, the latest increase adds about 10 percent more to the price of a liter of fuel than was the case at the beginning of last year.

Transportation sector representatives criticized the January 2013 increase as not only adding negative pressure on their industry, but favoring wider inflation as well. "Costs are going to increase more rapidly than last year," asserted Javier Altamirano, president of the National Association of Private Transport. "Any increase in fuel directly affects transportation."

For border region residents, the price increase was tempered by an exemption for regular gas, which stayed at the same price due to a policy of attempting to maintain standardization between Mexican and U.S. prices along the border. Fernando Carbajal Flores, president of the Onexpo gasoline distributors association in Ciudad Juarez, said the measure was necessary to prevent drivers from heading over to El Paso and, while making a gas run, spending extra money at other U.S. businesses and draining away income from Ciudad Juarez.

Miguel Messmacher, taxation and revenue under-secretary, discounted this month's fuel price increase as signalling a spiral of hikes over the course of the new year. Fuel prices, he said, will be influenced by other factors like the "international cost of fuel."

But Rafael Ortiz, national president of the Mexican Alliance of Transportation Organizations, recalled that truckers staged highway protests against fuel price hikes in 2012 and could make a similar stand this year.

Additional sources: El Diario de Juarez, January 6, 2013. Article by Martin Coronado. Reforma, January 5, 2013. Articles by Alan Miranda, Alejandra Lopez and Gonzalo Soto.

Frontera NorteSur: on-line, U.S.-Mexico border news
Center for Latin American
and Border Studies
New Mexico State University
Las Cruces, New Mexico