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Mexico president blames gas price hike on ex-president and 'external factors'

06/01/2017
14:43
Francisco Reséndiz
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During a televised address to the nation, President Enrique Peña Nieto defended the gas price hike as an extremely difficult but necessary decision his administration had to make.

Mexico President Enrique Peña Nieto defended the recent gas price hike that's led to widespread demonstrations and looting by blaming it on external factors and decisions made by past administrations, specifically those by former President Felipe Calderón Hinojosa, who he said did nothing about the massive government subsidies it “wasted away” on gas. He also said the decisions that led to the gas price hike are unpopular, but were absolutely necessary.

“In the last administration alone [Felipe Calderón's], the federal government wasted nearly one trillion pesos [nearly 48 billion dollars] on gas subsidies. And I use the word 'wasted' because it was literally money the government threw away by giving away free gas, money that could've gone towards investing in public transportation, schools, universities and hospitals,” said the President in a televised address to the nation.

When discussing the challenges Mexico faces this year, Peña Nieto said that the international price of oil has increased by nearly 60%, which is why had the federal government not done away with the subsidied it had been providing for several years now, drastic measures would have had to have been taken, such as making cuts to social programs that would affect the country's most vulnerable citizens.

He continued by saying that even before the highly unpopular gas price hike became effective, the federal government had already made 190 billion pesos in budget cuts (nearly 9 billion dollars), in addition to 10% cuts in salaries and wages for high-ranking public officials at the federal level.

Allowing international prices to control gas prices in Mexico was a very difficult decision to make, said the president, but its his responsibility, as president, to make difficult decisions today in order to avoid bigger problems in the future.

During the address while discussing all the problems not canceling the government gas subsidies would have created in the future, the president asked: “What would you have done?”

Despite defending and explaining the reasons for his administration's unpopular decision during most of the address, he does accept the fact that people are extremely upset and angry over the gas price hike. “I understand why you feel this way,” he said.

However, he says selling gas at an artificially low price in 2017, would've cost the federal government over 200 billion pesos (around 9.5 billion dollars), which is equivalent to four months of funding for the Mexican Social Security Institute, which provides healthcare, ER, daycare and many other services to over 60 million Mexicans,

He also reassured his stance that the country's energy reforms that he and his party spearheaded had nothing to do with the gas price hike, nor new taxes.

Lastly, the president urged his cabinet members to protect citizens and avoid allowing the gas price hike to be used as an excuse to make unjustifiable increases to other products and services, and that his administration is meeting with members of Mexico's productive sectors to design a policy package aimed at helping family's financial situation, promoting investments and creating new jobs.  

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