Shock at Mexican Fuel Price Hike Turns to Pandemonium

Reaction to the 20 percent hike in fuel prices on New Year's Day has been swift, causing riots and looting resulting in four deaths and arrests of over 700 people, but President Enrique Peña Nieto continues to justify the need to end fuel subsidies.

2 minute read

January 9, 2017, 7:00 AM PST

By Irvin Dawid


In addition to the looting and fatalities, The Associated Press reports on blockades performed by truckers at ports, highways and terminals. CNN has photos showing the looting of a department store and stealing fuel at a gas station.

While the price hike has been justified by President Enrique Peña Nieto as a "responsible measure for the stability of the economy," according to a government blog, it has led to a great deal of civil unrest. Peña Nieto also emphasized that the price hike is not a result "of the Energy Reform" or increase in taxes, but of an increase in global prices.

I know that allowing gasoline to rise to its international price is a difficult change, but as president, my job is to precisely make difficult decisions now, in order to avoid worse consequences in the future," Pena Nieto said in a televised address. "Keeping gas prices artificially low would mean taking money away from the poorest Mexicans, and giving it to those who have the most."

As posted earlier, the hike is result of energy reform, specifically the deregulation of fuel prices to allow for prices to be determined, in part, by global oil prices. However, the energy reform that Peña Nieto was likely referring to is the 2013 proposal to allow foreign investment in the state-owned oil company, Pemex.

The government blog elaborated on why Peña Nieto needed to end the subsidy of fuel prices from an equity perspective:

He would have had to stop funding programs in the health sector, the education sector , which are priority and which are certainly a priority for the government against which would have meant devote those resources to maintain a fixed price of gasoline.

More photos appear in the AP article in the Daily Mail.
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Related in Planetizen:
New Year's Shock Greets Motorists at Mexican Gas StationsJanuary 5, 2017: Mexico began deregulation of gasoline prices to the dismay of motorists, as gas prices jumped about 20 percent on New Year's Day. People are so upset that pundits suggest the decision may imperil President Enrique Peña Nieto's re-election next year.

Saturday, January 7, 2017 in The Associated Press

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