• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 15 hours One Last Warning For The U.S. Shale Patch
  • 2 hours Oil Slips Further From 2019 Highs On Trade Worries
  • 56 mins Once Upon A Time... North Korea Abruptly Withdraws Staff From Liaison Office
  • 11 hours Modular Nuclear Reactors
  • 20 hours Chile Tests Floating Solar Farm
  • 2 hours Poll: Will Renewables Save the World?
  • 1 day China's E-Buses Killing Diesel Demand
  • 1 day Trump sells out his base to please Wallstreet and Oil industry
  • 1 day China's Expansion: Italy Leads Europe Into China’s Embrace
  • 2 days Trump Tariffs On China Working
  • 2 days Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 2 days Biomass, Ethanol No Longer Green
  • 24 hours US-backed coup in Venezuela not so smooth
  • 1 day New Rebate For EVs in Canada

Fuel Price Protests In Mexico Lead To Critical Situation

Mexico Protests

Mexicans, who took to the streets at the start of this week to protest a sharp spike in fuel prices, have now created a critical situation in at least three states, according to state oil giant Pemex.

Protesters, Pemex said, have taken to blocking fuel storage terminals, which led to fuel distribution problems in the states of Durango, Chihuahua, and Morelos. Pemex warned that if the blockades remain, the operations of nearby airports can be affected, too.

The price increases, between 14 and 20 percent, were implemented by President Enrique Pena Nieto’s government in a bid to advance the deregulation of the oil market in the country and remove Pemex from its monopoly position.

Another part of the market liberalization effort, which took effect last year, was inviting foreign companies to partake in the exploration and exploitation of Mexican oil and gas deposits and the right to then produce and import fuel in the country.

However, Pena Nieto had promised that gas prices for end-consumers will be lower, not higher, and that the price liberalization will be gradual, taking place over the course of the year. On top if this, as the Los Angeles Times notes, the timing of the price hike is not ideal.

Related: 2017 – A Quiet Year For Oil?

The end of December/start of January is peak driving season in Mexico, global oil prices are rising, and U.S. President-elect Donald Trump is threatening its southern neighbor with pulling out of trade agreements and introducing tariffs on Mexican goods. In addition, the local currency is dropping against the greenback and inflation is rising.

According to some, to raise gas prices at such a moment represents the government’s urgent need for fresh cash, now more than ever, as Ford quit plans to build a US$1.6-billion plant in Mexico, deciding on a lower investment on its home turf, in Michigan.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News