22 | OCT | 2019
The polemic surrounding fuel prices
In recent years, the increase in fuel prices have sparked protests in Mexico - Photo: Michael Reynolds/EFE

The polemic surrounding fuel prices

11/04/2019
09:01
Mexico City
Editorial
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In France, a fuel price increase announced in November 2018 sparked violent protests with barricades and cars set on fire in the midst of the Champs Elysées

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Fuel is key to the economic life of any country. Although the new global trend is to stop depending on fossil fuels and adopting new ecological alternatives, the majority of the countries still base mobility on fuel and Mexico is among these countries.

As a result of the importance of fuel, the fuel prices have always been a key factor for the economy and even for the social stability of the countries. In Mexico, at the beginning of 2017, a 20% increase in fuel prices sparked protests and riots in several cities. In France, a fuel price increase announced in November 2018 sparked violent protests with barricades and cars set on fire in the midst of the Champs Elysées, clashes with the police, and hundreds of people arrested. President Emmanuel Macron had to backtrack.

In 2019, the fuel prices in Mexico have been questioned because the government claimed that there would be no more increases beyond the inflation percentage.

In order to stimulate a price reduction, last month, the Finance Ministry announced fiscal stimuli to both Premium and Magna fuels to promote a decrease; nevertheless, nothing has changed the fuel prices.

On Tuesday, President López Obrador accused gas stations of increasing their profit margins by keeping part of the fiscal stimuli, which aren't reflected on the final price.

The National Organization of Petroleum Dealers said that the “irregular fuel supply is a reality that influences the final fuel prices, which should be solved” and announced its intention to meet with the Finance Ministry to discuss and analyze the information they both have.

Yesterday, the President insisted that Pemex reduced fuel prices in gas stations and they, instead of lowering the prices, increased them.

Gas stations have been scrutinized by the Federal Economic Competition Commission for over a year when it was discovered that there was an alleged concentration of gas stations that incurred in anticompetitive behavior and increased the power of a few economic agents. Now, an exhaustive investigation is necessary.

Who is right? Both parties have presented their reasons. The arguments of one party and the other should be presented transparently. Meanwhile, the consumer is left behind...once again.

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