First Gas Price Gouging of 2013 (EL MEXICANO, 1/5/13 by FELIPE GUTIERREZ REYES)

TIJUANA, BC – In the early hours on Saturday, gasoline price increases were recorded for the second time in the new administration of President Enrique Peña Nieto, and the first time in 2013, increasing the prices of all types of fuels by eleven centavos ($.01 US), so regular gasoline went from 10.81 to 10.92 ($.84 to .85 US) pesos/liter, premium went from 11.37 to 11.48 ($.89 to .90) pesos/liter, and diesel went from 10.90 to 11.01 ($.85 to .86) pesos/liter; and these increases are expected to remain until 2014, striking a strong blow to the family economy.

According to the President of the Association of Gasoline Station Owners of Onexpo Baja, Roberto Ontíveros, San Diego County regular gasoline is still higher than these prices based on the current exchange rate; regular on the other side of the border costs 11.78 ($.92 US) pesos/liter, while premium is 12.12 ($.95 US) pesos/liter and diesel is 12.93 ($1.01 US) pesos/liter.

"The gasoline prices are unpopular, but subsidies can no longer sustain them, but if we saw an increase of 5 and 8 centavos during all of 2012, now in this first increase of the year is 11 eleven centavos ($.01 US), and we do not know if it will stay at this figure in the region with the new policies; the fact is that increased", said the leader of gasolineros in Baja California, Roberto Ontíveros.

However, a study of El Colef reveals the Federal Government had maintained a policy of gradual increases in gasoline prices to reduce its subsidy on fuels. At the end of 2012, it is estimated the subsidy to gasoline in Mexico was 170 million pesos ($13 million US), which amounts to slightly more than 1% of the gross national domestic product (GDP). In addition, these prices will continue until 2014, which creates a serious economic effect for the population not having wages similar to those in United States in which to fairly compare prices with the North American market.

There is generalized indignation throughout society due to the rising prices of gasoline which in the past administration of Felipe Calderón increased in price by more than 50%. These increases, indicated by an El Colef study have been a factor in the rise in various foods prices leading to an inability of purchasing power by the working class to buy various basic products.

Specialists note it is necessary for Congress to open the door so that structural fund reforms are carried-out in energy and oil. The issue of tax reform is important for the energy sector to accelerate their growth in the shortest time possible, since investments in the sector are needed. We need to have a sector that is more transparent and has more corporate governance, with greater accountability.

The increase in the price of fuels was adopted by the last legislature with implementation until 2014. But this also depends on reducing the comparison with prices in the United States. Since at the moment they are compared with the neighboring country, more justification is needed to allow fuel price increases.

It should be noted that increases to the price of gasoline in previous years has been only 5 centavos for premium and 8 centavos for regular and diesel, but now in 2013 the Treasury has struck a much harder blow with these increases of 11 centavos for all three fuel types. http://www.el-mexicano.com.mx/informacion/noticias/1/3/estatal/2013/01/05/641054/2013-primer-gasolinazo.aspx

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