Mexico’s rising gas prices could make American border gasoline more expensive
The Mexican government announced gas prices would be going up at the start of the year as part of the petroleum industry deregulation President Peña Nieto has put in place.
Ironically, the deregulation of Mexico’s state-owned petroleum industry has resulted in price increases, which Forbes Mexico estimates will reach as much as 20 percent. As a result, many Mexicans are filling up their gas tanks north of the border.
UTEP economics professor Tom Fullerton said while the increase in gas prices throughout 2017 will make the cost of doing business in Juarez and the rest of Mexico go up, there’s no reason to fear for manufacturing investment in the area.
“It definitely won’t be enough to cause them to go to China,” Fullerton said, “The types of products that are competitive to make in Juarez are still competitive to manufacture in Juarez.”
Fullerton said, even in you never visit Mexico, the price increase can still hit your wallet because more Mexican nationals are filling up in El Paso. “Because there’s more drivers in that city buying over here in this city, gasoline prices in El Paso also tend to increase,” the professor said.
“In pesos, over there in Juarez, it lasts only four days. The whole entire week, I put $20 here and here it lasts up to ten days,” Fabian Martinez, a Juarense visiting El Paso, said.
A perceived difference in quality is only one factor. Right now, gas in Mexico is at around $2.84 USD to the gallon (converted from pesos/liters), about 72 American cents more expensive than in the US.
This is one thing many Juarenses are taking advantage of.
“We’re lucky to be on the border, so we can just cross over and fill up in El Paso,” said Edgar Garcia, a juarense who was pumping gas in the US.
Assuming a 12 gallon tank in a car getting 23.6 miles to the gallon, crossing from Juarez to El Paso to only fill up could save drivers around $14, even with an hour-long wait at the bridge after the projected 20% increase in Mexican gasoline prices.
