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Sunday, November 27, 2022

U.S. drivers wanting to fill up in Mexico hit with an unwelcome surprise

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Carlos Rosado van der Gracht
Carlos Rosado van der Gracht
Born in Mérida, Carlos Rosado van der Gracht is a Mexican/Canadian blogger, photographer and adventure expedition leader. He holds degrees in multimedia, philosophy and translation from universities in Mexico, Canada and Norway. Sign up for the Yucatán Roundup, a free newsletter, which delivers the week's top headlines every Monday.
Gas prices in Mexico are considerably lower than in the U.S. But when calculating for average income, filling up the tank for Mexicans has become exorbitantly expensive. Photo: Carlos Rosado van der Gracht

Over the weekend, Mexico’s federal government announced that it would be temporarily suspending its gas price subsidies along its northern border. 

The move comes after a record-breaking number of U.S. drivers have been entering the country to fill up their tanks at much cheaper prices than back home. 

“The influx of foreigners looking to buy cheaper gas has created a market imbalance and put a serious strain on our infrastructure,” said Mexico’s finance minister, Rogelio Ramírez de la O.

As a result, long lines have been forming at gas stations near the US border, causing serious supply issues for nationals. 

Though still considerably lower than in the U.S. gasoline prices have risen sharply in Mexico as well.

The temporary suspension of the subsidy in border cities like Tijuana has caused anger among locals, who are now facing higher gas prices than ever. 

Earlier: Is Mexico trying to have it both ways with Russia ‘friendship’?

The increase in the price of fuel has been blamed by governments around the world on Russia’s invasion of the Ukraine, as well as a myriad of other inflationary factors. 

Mexico’s gas subsidies have been historically championed by the federal government, in a move to protect the population from the effects of inflation. 

But leading economists in the country have noted that these subsidies are not sustainable in the long term and will have to be scaled back little by little — a process that has already begun. 

Despite being a large crude producer itself, Mexico relies heavily on the U.S. to refine the fuel into gasoline.

As a result, the price of gasoline in Mexico is said to be almost twice as expensive as it would be if processed at home.

This reality has been described as deeply troubling by President Andres Manuel Lopez Obrador, who in 2021 announced the purchase of the Deer Park refinery in Texas.

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