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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.

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.

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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