Gasoline Wars Heat Up

Not boiling over yet, but they are getting warm

Gas stations offering discounts up to 30 cents per liter over the standard Pemex price have led to doubts about the quality of the product and the prices of gasoline in Tijuana. Geeze, can’t we just be happy with a good deal? Let’s not over analyze our good fortune, let’s just stick the gas in the car and see how far down the street we can get with it.

gas.jpgThe oil industry is changing in Mexico, with the government oil monopoly Pemex losing its grip, and competition finally creeping in in an effort to save the industry from total collapse.

The Association of Petrol Station Owners, called APEGT for its Spanish acronym, is lobbying to be allowed to charge prices that are competitive with United States prices, which have plunged as the U.S. has become self sufficient in oil due to the new fracking process. This price plunge is killing Tijuana gas stations, who just can’t compete. So far the Mexican oil industry has loosened up enough to allow stations to offer discounts of up to 30 centavos per liter, not a lot, but it’s something. There are about four liters in a gallon. 

Prices should only get better, as the plan is for the government to completely open the gasolinera business to competition by 2018, when international companies will partner with national distributors. Once the government allows free enterprise into the industry, hopefully it’s going to be Katie bar the door. That’s the plan, anyway. Mexico does not have a history of relishing competition, and laws requiring it are often ignored.