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Mexicans Angered by Increase in Gasoline Prices

ISSN:1054-8890
LADB Article ID: 80171
Category/Department: Mexico
Date: 2017-01-04
By: Carlos Navarro

Mexicans are outraged over a government decision to raise gasoline prices––a move the government says is the result of the elimination of subsidies and of recent trends in the global oil market. Oil prices stabilized and increased slightly during December, in part because of an agreement reached by members of the Organization of Petroleum Exporting Countries (OPEC) to put a cap on production Two other factors led to shortages at the beginning of 2017: Fuel thefts, which have reduced supplies at some distribution centers, and an outdated storage and infrastructure system, which has prevented the government from keeping a higher inventory of imported gasoline. The increase in gasoline prices, which rose by as much as 20% in some areas on Jan. 1, is just the first of several possible price hikes anticipated this year. In a statement announcing the increases, the finance ministry (Secretaría de Hacienda y Crédito Público, SHCP), said Magna, as the most widely used grade of gasoline in Mexico is known, would increase by more than 14% to an average of about 15.99 pesos (US$0.76) per liter, while Premium grade would rise by about 20% to an average of 17.79 pesos (US$0.84) per liter. The government’s decision to raise gasoline prices prompted angry demonstrations throughout Mexico, with unions, civic organizations, and other groups banding together to block important highways when the new pricing went into effect during the first week of January.

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