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Mexico suspends gasoline subsidy as U.S. drivers cross border for deals

Commodities Apr 02, 2022 07:10PM ET
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© Reuters. FILE PHOTO: A worker fills a car belonging to a Texas resident, with gasoline at a gas station following increased fuel prices in U.S., in Ciudad Juarez, Mexico March 14, 2022. REUTERS/Jose Luis Gonzalez

MEXICO CITY (Reuters) -Mexico, which has been subsidizing gasoline to soften price spikes, said on Saturday the policy would not apply in the U.S. border region this week, citing shortages as more Americans drive south to fill their tanks.

The suspension of the subsidy from April 2-8 covers cities in the border states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora and Baja California, including Tijuana, one of the world's busiest border crossings.

Mexico's finance ministry said in a statement there was a gasoline shortage in the area "from an imbalance between supply and demand."

"In the United States, gasoline prices are higher than in Mexico, and citizens of that country cross the border to stock up," the finance ministry said.

As fuel prices have spiked after Russia invaded Ukraine, more people living in the United States are driving across the border into Mexico in search of lower gas prices.

Mexico's subsidy has been championed by the government of President Andres Manuel Lopez Obrador, who has long promised to insulate consumers from sharp price hikes at the pump.

In an interview with Reuters on Friday, Deputy Finance Minister Gabriel Yorio said Mexico planned to use the extra revenue from higher oil prices to subsidize domestic gasoline and diesel prices.

Mexico suspends gasoline subsidy as U.S. drivers cross border for deals
 

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Comments (3)
Benjamin USA
Benjamin USA Apr 02, 2022 9:04PM ET
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Why subsidize gasoline? Just charge less tax for common citizen.
William Smith
William Smith Apr 02, 2022 9:00PM ET
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If Mexico didn't have a government owned oil company they'd have oil running out their ears.
Godswill Jacob
Godswill Jacob Apr 02, 2022 7:39PM ET
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The government can only shield the people for so longLet the forces of Demand and Supply drive the price as it should and let Mexico's productivity balance the underlying differences not trying to insulate, for how long can that be done and at what expense?
Trevor Roberts
LimitUp Apr 02, 2022 7:39PM ET
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Thank you sir, i still have hope
 
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