A gas price hike in Mexico has stunned the country.
Over the last couple of months mexicans felt a huge gas hike from 9 pesos to 20 pesos. Just this last weekend the hike was 20% and caused protests across Mexico and civil unrest in some parts of the country, spurring the hashtag #gasolinazo.
There are road blocks in at least 25 states out of 31 and thousands of protesters have shut down gas stations throughout the country in a statewide protest that started last week of the gasoline hike.
Six people have been killed, 1,500 arrested, and at least 420 businesses affected according to TeleSurTV.
The Mexican drug cartels have threatened to blow up gas stations in retaliation for the price hike. Erin Gallagher writing for medium.com also noted how the tweet storm using the #gasolinazo hashtag involved bot accounts that seemed to be tweeting government sponsored news to shape the narrative of the protest.
To put this in perspective, $4 a gallon, or 20 pesos, is the minimum wage/day in Mexico.
We talked to two different sources, one in Mexico, who relayed that Pemex (Mexican gasoline) security officers have stolen from the Mexican people. One alleged that Pemex has now gone to war with the drug cartels, police, and local people. One source also alleged that the recent Chinese auto deal to bring in Chinese cars into Mexico is also what caused the problem. The problem goes further then that though, as Mexico recently faced a decline in oil production dropping by as much as 120,000 barrels a day.
“This all started back in August when two Pemex Security officers stole a 1,500-liter tank and threatened police at gunpoint. This in turn caused a major gas shortage for both Mexican Drug cartels and local populous alike causing both to arise in protest. Protests have erupted across Mexico and are still occurring. Pemex is now going to war with the Mexican government, the cartels and the people.
They are saying (everywhere evidently) that Mexico is getting free market pricing now and that is why it got so bad. That is NOT TRUE. Real free market pricing will not happen for practically all of Mexico until NOVEMBER 2017. Free market pricing means that gas should be below 9 pesos a liter. Instead, it is around 20. That’s $4 a gallon. Pena Nieto was on TV last night claiming American free market pricing was causing the problem but that does not wash. All you have to do is look at the commodities indexes for the truth, Mexico’s prices are well over doubled. Someone is raking it in, as they always have, prior to this “crisis” gas was already 2X over market. Once the real free market kicks in, Mexicans are going to see gas at $2 U.S. a gallon, because they are allowing several competitors in. The major price spike has hurt Mexico’s image badly and THAT is the reason why the peso went straight into the tank and NOTHING ELSE.
That is likely to actually help Mexico’s economy, though, because it will make exports cheaper to buy, and Mexico is a heavily industrialized country. Mexican quality totally trashes China’s quality on top of it. China tried to bring cars in. They were OK, but that adventure failed because Mexicans simply produce better cars and no one wanted Chinese. You might not be inclined to believe it, but Mexican made cars are actually good. We are waiting and seeing where the gas prices finally land and have enough stored to last at least two months,” a source said.
These claims are verified by oilprice.com, which writes:
“Five security officers in the employment of Mexico’s state oil company Pemex were caught siphoning fuel from a pipeline in the state of Veracruz as the country struggles to contain pipeline theft that is burgeoning out of control.
Police responding to an emergency call found the five security personnel while they were filling a 1,500-liter tank. The security officers reportedly threatened the police at gunpoint and attempted to pull jurisdiction.”
Another source in Mexico had this to say about his country’s current situation.
“A couple of towns had heavy police repression, but major cities just some lootings in walmarts and other stores
Its not chaos, but lets wait how. This will evolve this next days. People are not happy at all. Basically government has robbed so much lately that they are running out of money, so to get out of that they rise up the gasoline price like 30% in 2017. People didn’t like that very much obviously, plus President Peña Nieto has been hated by everybody almost since he arrived to the chair.
Doesn’t help the fact that Mexican gasoline (Pemex) is sell in US at half the price that is sell to the people here in Mexico. That only expose government stupid policies.
Most people are protesting peacefully, the lootings it said has political roots, trying to scare people to join protests and preparing the road to more repressing laws.”
Mexico has been embroiled in unrelated protests since 2013, then taking a three-year hiatus and restarting again in 2016 over 11 neo-liberal structural reforms signed by President Enrique Peña Nieto. The reforms resulted in the layoffs of tens of thousands of teachers, and Nieto promises even more layoffs in the future.
Many reports have surfaced of civil unrest in several towns, one of which you can see in a video below of protesters burning a police car. In another small town, my source says that seven police were ran over by rioters.