Mexicans are bracing to kickstart the New
Year on a sour note, with protests planned
against the government's huge hike in
gasoline prices.
President Enrique Pena Nieto has promised that
fuel prices will fall thanks to his landmark 2014
energy reform, which ended a seven-decade-old
monopoly held by the state-run firm Pemex.
The government plans to end subsidies and let
the market dictate prices in March, but Mexicans
will feel the pinch at the pump before they start
falling.
The finance ministry announced Tuesday that the
price of gasoline would increase by as much as
20.1 percent to 0.88 dollars per liter on January
1, while diesel would rise by 16.5 percent to 0.83
dollars.
The price ceiling will be adjusted daily from
February 18, before letting supply and demand
determine them in March.
Around 100 protestors blocked a service station
in the Pacific resort of Acapulco on Friday, while
Jalisco authorities investigated reports that a
drug gang threatened to set fire to service
stations.
A protest is planned in the capital on Sunday
while Mexicans were urged on social media to
block service stations on Monday. People were
also encouraged to boycott fuel for three days.
Before the price announcement, fuel shortages
had already angered Mexicans in several states.
"The fuel price increase causes outrage. People
are right: it's not fair. I support each family, I
share their outrage and anger," Aristoteles
Sandoval, the governor of western Jalisco state,
wrote on Twitter.
Sandoval's criticism drew particular attention
because he is a member of Pena Nieto's centrist
Institutional Revolutionary Party (PRI). Furious
opposition governors plan to meet with federal
government officials next week to discuss the
price hike.
"We just had a security meeting (between
governors and Pena Nieto) days ago and there
was not one comment about this situation," said
Mexico City's leftist Mayor Miguel Angel
Mancera.
Competitive prices
The protests are the latest headache for Pena
Nieto, whose popularity has plummeted below 25
percent this year due to his government's failure
to curb drug-related violence, disappointing
economic growth and his unpopular decision to
host Donald Trump before the anti-immigration
Republican won the US presidential election.
Finance Minister Jose Antonio Meade defended
the fuel price increase, saying it would not
trigger more inflation and that eventually the
"final price for consumers will be among the
most competitive in the world."
Mexican energy industry expert David Shields
voiced doubts that the demonstrations will force
the government to change its mind.
"After such a blunt announcement, it's very hard
for the government to back down because it has
a very small margin. The country's fiscal
situation is terrible and you can't keep
subsidizing gasoline," Shields told AFP.
The fall in global oil prices in recent years has
forced the government to cut its budget and
slash spending at Pemex.
And the peso has fallen to historic lows due to
Trump's protectionist rhetoric against Mexico.
Fewer tips?
The liberalization of gasoline prices was
supposed to begin in 2018, but the government
decided to start it now.
"An immediate drop in prices was an unreal
expectation. We have seen a very strong
depreciation of the peso," Shields said.
In Mexico City, service station worker Maria de la
Luz Lopez worried that the price increases could
hurt her.
"I'm afraid that to compensate for the increase,
(customers) will no longer give us tips," said
Lopez, who like many in her field does not earn
a wage and depends on the generosity of drivers.
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