Mexicans didn't benefit from the deregulation of fuel prices
in Mexico, consumers are often surprised by sudden price hikes, especially in regards to gas and fuel- Photo: Michael Reynolds/EFE

Mexicans didn't benefit from the deregulation of fuel prices

15/12/2019
09:39
Mexico City
Editorial
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Mexicans have a long way to go and understand about the rules that dominate the free market

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It was said that gas and fuel price decontrol was implemented as a measure to stimulate competition among suppliers and that this way, the offer, and demand would determine the prices, allegedly for the benefit of consumers; for example, this was the argument used by the Peña Nieto administration, which was also part of the energetic reform issued almost three years ago. With this measure, there were no more sudden gas price hikes; these sudden increases were small but progressive, applied in a way that the consumer didn't resist it.

The deregulation of prices was established to allow the incursion of various gas and fuel suppliers and sellers in the Mexican market, which has been a monopoly controlled by state company Pemex until recently. It was also said that this had two aims: allow free competition among different brands, which would offer versatility and variability to Mexican consumers and to allow Pemex to focus on the sear and extraction of oil and its derivatives, thus leaving the task of commercializing and regulating the prices on the hands of others.

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A study about the habits of Mexican gas and diesel consumers issued by PETROIntelligence shows that the owners of the 36 million cars in the country care more about how close is the gas station to their homes than about low prices; these are also important factors they consider before choosing a gas station. Moreover, another factor that comes into play is the need once the tank is empty, which also shows Mexicans aren't cautious. All these factors halt the opportunity to purchase gas at better prices, but also affect the performance and useful life of the motor.

Mexicans often complain about sudden increases in price but in reality, consumers prefer comfort over acquiring fuel at a better price, which seems like a contradiction because they often complain about price hikes in everyday goods.

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Mexicans have a long way to go and understand the rules that dominate the free market. They need to understand that consumers have an impact that could push suppliers to improve prices and compete to win more clients, lower their prices, and benefit everyone.

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