Mexico Halts Subsidies as More U.S. Citizens Cross the Border for Cheaper Gas Prices

Mexico has suspended its gasoline subsidies as more U.S. citizens are crossing the U.S.-Mexico border for cheaper gas prices, draining the country's supply.

Gas prices in the United States are much more expensive than in Mexico, leading U.S. citizens to head south and stock up on fuel, according to a statement from Mexico's Finance Ministry.

The wave of U.S. citizens coming to Mexico for gas prices has led to reports of shortages in Mexico's own supply, according to a Bloomberg News report.

Mexican President Andres Manuel Lopez has vowed to cut down exports and increase oil refining in an attempt to make the country's energy self-sufficient.

Lopez Obrador has said that state oil company Petroleos Mexicanos could keep exporting crude to take advantage of high prices and use the funds to provide relief to consumers.

The Finance Ministry saw crude exports at 879,000 barrels a day this year, while 764,000 barrels in 2023 during the preliminary budget draft delivered to lawmakers on Friday.

Mexico Oil Subsidies

Deputy Finance Minister Gabriel Yorio said on Friday that Mexico will use the extra revenue it collects from higher oil prices to subsidize domestic gasoline and diesel prices, according to a Reuters report.

Mexico remains a major oil producer and exporter while its production has declined significantly in recent years.

Yorio said in an interview that without the fuel subsidy, the annual inflation would jump above nine percent within four months.

The annual inflation in Mexico has reached 7.29 percent in the first half of March.

Yorio said that all that surplus that will be generated by higher prices will also be reflected in the cost of gasoline.

He added that they are going to have to use the surplus to finance the additional subsidies.

Mexican motorists have benefited from the gasoline subsidies, being protected from big spikes in fuel prices.

U.S. Citizens Crossing the Border for Cheaper Gas Prices

Texans are driving to Mexico for cheaper gas prices with one manager at a Juárez, Mexico, gas station, saying that they are close to El Paso. He confirmed that they are seeing more traffic, and more people with Texas license plates.

Texans drivers are paying an average of $4.19 a gallon, while fuel in Mexico costs just $3 a gallon, according to a New York Post report.

El Paso resident Rene Gaucin said that they are coming to Juarez, Mexico as gas prices in El Paso are "overly expensive."

El Paso and Juarez are sister cities, with most people living in El Paso can drive into Mexico for 15 minutes or less.

Texans heading back from Mexico have to sit in their idling cars while waiting in long security lines to re-enter United States.

The cost of gas in the United States has been spiking even before Russia's invasion of Ukraine in late February.

Russia is the world's third-biggest oil producer, with the ongoing conflict with Ukraine driving the gas prices soaring in the United States and other countries.

This article is owned by Latin Post.

Written by: Mary Webber

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