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The longer gas stations remain closed, the greater the economic fallout. The longer gas stations remain closed, the greater the economic fallout.

Economic impact of fuel shortages will widen if they continue

Losses incurred by gas stations now estimated at 10 billion pesos

Gas stations and the transportation sector are already taking a heavy financial hit from the prolonged and widespread fuel shortage but if it continues into next week, the impact on the economy will widen, business groups warn.

Losses incurred by gas stations in 11 affected states have reached 10 billion pesos (US $522.3 million), according to the Mexican Association of Gas Station Owners (Amegas).

Stations in Jalisco have taken the biggest hit, the organization said, with losses totaling an estimated 3 billion pesos (US $156.7 million).

“In Jalisco, 300 million pesos [worth of fuel] is sold in a single day. We’ve gone 10 days in which almost no gasoline has been sold . . .” Amegas said.

Gas stations in Michoacán, Hidalgo, Guanajuato, México state, Querétaro, Mexico City and Puebla, among other states, have also lost significant revenue.

Luz María Jiménez, president of the Puebla and Tlaxcala Gas Station Owners Association, said that she had appealed directly to the state oil company to send more fuel, more quickly.

“The priority for us is for stations that don’t have gasoline to be supplied. Our business is to sell gasoline and the only thing we want is gasoline,” she told a Puebla radio station yesterday.

The Confederation of Chambers of Commerce, Services and Tourism (Concanaco-Servytur) said that public transit operators in many affected states have been forced to take at least part of their fleets off the road.

In a statement, the business group added that while supermarkets, department stores and other stores haven’t yet reported product shortages, if the gasoline shortage “extends for another week . . .we’ll get to that point.”

Concanaco president José Manuel López Campos said that small and medium-sized businesses would be affected the most if the fuel shortage doesn’t come to an end soon, pointing out that they are also dealing with increases to electricity rates and the minimum wage.

Nathan Poplawsky, president of the Mexico City Chamber of Commerce, Services and Tourism (Canaco-CDMX), called on the federal government to resolve the shortage problem promptly in order to avoid an impact on “public transportation, the transportation of goods and the supply of raw materials as well as the cancellation of services.”

The Confederation of Industrial Chambers (Concamin) said that companies in México state, Hidalgo, Jalisco, Michoacán, Guanajuato and Querétaro have already reported problems distributing products such as dairy, vegetables and beverages.

Tourism is another sector that will likely suffer as fuel shortages continue.

Hotels in León, Guanajuato, where the 2019 State Fair starts tomorrow, have reported that reservations are down 45% on last year’s numbers. The fuel shortage in Guanajuato and surrounding states has been identified as the cause of the weak interest.

“We’re very worried . . . because it’s the fair that we’re known for in the whole country, we [usually] have [a lot of] visitors and buyers who come to the city,” said Gabino Fernández Hernández, head of the León branch of the Mexican Chamber of Commerce.

Juan Pablo Castañón, president of the influential Business Coordinating Council (CCE), told Milenio Television yesterday that the fuel shortage had started to affect the manufacturing sector.

“Not just workers in their movements to the workplace, but also production plants, particularly in the auto industry, which isn’t able to get enough fuel for new vehicles,” he said.

Alfredo Arzola, director of the automotive industry hub in Guanajuato, told the news agency Reuters that assembly plants could start idling in a week if a fix to the shortage problem isn’t found.

“Investments are being put at risk,” he said.

Castañón called on the federal government to collaborate with the private sector to import more gasoline in order to get more fuel to gas stations in affected states.

“Pemex can’t do it alone . . . A comprehensive plan with specific measures and timeframes is needed. In the private sector, we want to collaborate to regularize [the situation] as quickly as possible,” he said.

Source: Sin Embargo (sp) 

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