Mexico suspends gasoline subsidy on the border with the US

Mexico announced on Saturday that it suspended for a week the gasoline subsidy that it maintained in 41 municipalities near the border with United States.

The decision comes after the increase in demand in that region, where many US drivers have been seen crossing into Mexican territory to take advantage of low fuel prices, something that has generated gasoline shortages.

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The Ministry of Finance indicated in a statement that between this Saturday and April 8 no tax incentives will be granted within the 20-kilometer border strip and the territory between the parallel lines of more than 20 and up to 45 kilometers to the dividing line international with the United States.

The measure will be applied in 41 border municipalities of the states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas, said the Ministry of Finance without offering details of the reason for the measure. Among the affected municipalities is Tijuana, a city where one of the largest border crossings between the two countries is located and where long lines of vehicles have been observed at service stations in recent days.

The Mexican government admitted in another statement that in some parts of the northern border there is a shortage of gasoline due to the fact that US citizens are crossing the border to stock up, since fuel prices in the United States are higher than in Mexico.

To the problems of increased demand have been added the supply difficulties generated because importers have stopped purchasing gasoline, which has led service stations in the border region to resort to Petróleos Mexicanos, indicated the Ministry of Finance.

The war unleashed by Russia’s invasion of Ukraine has generated a sharp rise in the price of oil that has been reflected in the value of gasoline, which in the United States has exceeded six dollars per gallon.

Faced with this situation, Americans living near the border are crossing into Mexico to stock up on gasoline, which on the Mexican side costs about a dollar per liter.

The measure comes after Mexican President Andrés Manuel López Obrador has defended the fuel subsidy for weeks and has ruled out making changes to his policies, despite the rise in oil generated by the war.

“There is a subsidy, to put it clearly, so that even if the price of imported gasoline increases, this is not passed on to consumers,” said López Obrador at the end of February, ruling out adjustments to his policies.

Source: Elcomercio

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