Consumers line up with their gas containers as shortages continue. Consumers line up with their gas containers as shortages continue.

Gasoline shortages could get worse

Pemex unable to resolve supply issues; panic buying also blamed

Gasoline shortages continue in at least 13 states, resulting in long line-ups at gas stations, panic buying and unrest among consumers as Pemex has been unable to resolve supply problems.

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The affected states are Aguascalientes, Guanajuato, Michoacán, Zacatecas, Oaxaca, Chihuahua, Guerrero, Morelos, Jalisco, Puebla, Tlaxcala, Durango and San Luis Potosí.

It was in the latter that disgruntled citizens took to protesting, blocking the main highways into the capital city as well as its main streets.

Government officials posted on Twitter that the gasoline shortages were caused by consumers and panic buying, a situation that was only worsened by the blockades, they added.

While that may have been true in San Luis Potosí, it wasn’t the case elsewhere in the country, where Pemex officials have tried to justify the situation in several ways.

In Jalisco, the December vacation break was cited as the main reason for a 50% surge in demand for gasoline and diesel.

Production was also affected by a revision and overhaul of obsolete equipment in some refineries, the oil company said, along with pipeline problems.

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The latter forced the company to distribute fuel from its Tuxpan, Veracruz, plant by land, which meant it was unable to meet demand in the central region of Mexico.

An additional issue for the company is the ongoing illegal tapping of its pipelines. Pemex said that every time a pipeline is tapped it takes its staff at least 12 hours to reestablish the flow of fuel.

That may be the case for consumers affected by a recent tap on the Salamanca-Aguascalientes pipeline, but in Puebla it’s a different story.

Even before the recent shortages, consumers in that state have opted to purchase their fuel on the black market with the result that gas station sales have dropped by as much as 95%.

Pipeline thieves have long offered gasoline at more competitive prices than Pemex, and are well stocked when shortages affect lawful vendors.

In the view of gas station owners, the situation could worsen.

The Mexican Association of Gas Station Owners, or Amegas, warned in a statement that shortages could be seen throughout the country beginning Sunday due to the manner in which Pemex is urging station owners to sign new supply contracts. Those contracts must be signed by January 1.

Amegas has also accused Pemex of withholding deliveries from station owners who have not signed.

The association also claims that current supply problems are due to Pemex’ financial problems: it doesn’t have the cash to pay for product or for completing the revision of its refineries.

On the political front, the governing Institutional Revolutionary Party (PRI) has been blamed for the poor implementation of energy reforms.

“The National Action Party backed up this government in the energy reforms (of 2013), which were one of the most important structural reforms geared toward correcting the economic disaster that was the aftermath of over 70 years of bad PRI governments,” said Senator Marko Cortés.

“It is now fully clear that the federal administration is incapable of successfully implementing those reforms,” he charged.

Alejandro Sánchez of the Democratic Revolution Party stated it had been a mistake to liberalize gas and diesel prices before the originally planned date, and proposed that freeing prices be delayed until its effects can be fully assessed.

The new oil pricing scheme will be yet another blow to the pockets of the people of Mexico, Sánchez said. “Not only has the government’s policy with regard to security failed, but also with regard to the economy.”

Source: Animal Político (sp), Debate (sp), Reforma (sp), El Universal (sp)

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  • Blair

    The stealing of gasoline will sky rocket now!…doesn’t the country import a majority of fuel from the gringos?..with the peso sinking did they need to raise the cost per litre?..this will be hard on the working class!

  • Epazote

    Those cynical and greedy gas station owners participating in this hoax are being black listed by users in our area for next year. A couple stations in our area have claimed shortages but most stations have no supply issues; so we plan to use only those stations that did not artificially hoard gasoline in order to make a New Year cash grab. Pass it on. You push, we push back.

  • K. Chris C.

    In the Austrian School of economics it is said that only government cannot successfully bring to market essential goods at any price.

    History then informs that being nothing more than a criminal syndicate, government can only produce 4 things: poverty, misery, death, and lies.

    An American citizen, not US subject.

    • David L. Allison

      the Austrian School of Economics, as well as its’ offspring the Chicago School of Economics, also are the founders of the trickle down school of right wing libertarian economics that have laid waste to the European economy. Scandinavian countries are a good example of successful government by rejecting the Austrian School polemics.

      The same disastrous result of the disgraced austerity approach to privatizing the public economy and public resources would have brought about the second great depression in the US had it not been for the stimulus packages initiated, approved and pushed through by GW Bush and Obama.

  • bob

    As long as the government has a monopoly on gasoline, it will be inefficient and corrupt… pretty much like the rest of the government. Only it is worse in Pemex because fuel is a cash cow for the thieves, both inside and outside of Pemex.

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