Mexico’s government has suspended gas subsidies in its northern border states due to U.S. residents depleting their supply.
Gasoline prices in the United States are higher than those in the Mexican market, and thousands of Americans have been taking advantage of the discount fuel south of the border. Unfortunately for Mexico, this level of demand has put a strain on their supply which has “led to reports of shortages.”
Maybe Mexico should have paid for that wall after all.
To help the Mexican people deal with the rising cost of gasoline associated with the conflict in Ukraine, the government issued a subsidy, but following the influx of gasoline tourists from the United States, that subsidy will no longer apply to Mexico’s northern-most territories.
The subsidy has been lifted from the border states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora and Baja California.
A statement issued by the Mexican Ministry of Finance indicates that the decision to halt relief in the region might be temporary, explaining that prices in the 28-mile zone along the United States border will be reassessed after this Friday.
In an interview with Reuters, Deputy Finance Minister Gabriel Yorio said, “in the United States, gasoline prices are higher than in Mexico, and citizens of that country cross the border to stock up.”
Mexico’s president, Andres Manuel Lopez Obrador, has taken a nationalist position in the global spike in oil prices. Exports from Mexico to the rest of the world could be used to subsidize and stabilize the prices that Mexicans pay for fuel, and budget drafts have been issued to achieve that goal. Finance Minister Ramirez de la O has expressed confidence that the policy would remain successful even if oil reaches $155 a barrel.
