MEXICO CITY, Jan. 10 (UPI) — The goal of Mexico ending government control of gas and diesel prices was to prevent needing cuts to the national budget, but quickly rising prices of gas have instead resulted mostly in protests, riots and looting across the country.
Hundreds of stores in Mexico have been looted, people are stealing gas from refilling stations and U.S. officials were so concerned about a protest at the Tijuana border crossing they actually shut it down as Mexicans reacted to a 20 percent jump in fuel costs since price controls started being eased on Jan. 1.
Relaxing price controls is part of Mexican President Enrique Peña Nieto‘s plan to improve the budget situation there by ending the state-run energy monopoly.
Peña Nieto has struggled to respond to citizens in Mexico — who are concerned about the rapid increase in the cost of gas and how it will affect the prices of food and any other product shipped by truck — which has led to the protests and looting that has resulted in well over 1,500 arrests and several dead across the country in clashes with police.
“We don’t want this corrupt country any more,” Alicia Rios, a receptionist who marched through downtown Mexico City on Saturday, told The New York Times. “The legislators get 10,000 pesos in gasoline vouchers when the people can’t afford to fill up their tanks … If gasoline goes up, everything goes up.”
The plan is to slowly loosen price controls over the course of 2017, so that, by the end of the year, market demand drives fluctuations in the cost of fuel.
About half of Mexico’s gas is imported from the United States, but it is handled by the government-run company Pemex and the price to consumers is set by the government. The hope is ending government controls will attract other oil companies to do business in Mexico.
The government is also ending the issuance of gas vouchers to elected officials, government employees and other wealthy members of Mexican society, which it says will prevent cuts to social programs and other parts of the national budget.
In the meantime, seemingly sudden price hikes have shocked consumers. Aside from marches, Mexicans have been spotted filling gas cans with stolen fuel, clearing store shelves of everything from food to appliances, and blocking roads and highways.
Protesters took over the border inspection lanes at the Tijuana crossing from San Ysidro on Saturday and waved people through without their vehicles being checked or their paying taxes on anything bought in the United States. U.S. Border Control officials diverted traffic to another highway and border entry, keeping it closed for about four hours as protesters were dispersed.
Some analysts note the problems could have been avoided, and expect Peña Nieto and other politicians to pay a price in the 2018 elections there, especially considering they have refused to rescind the end of price controls.
“They didn’t think about it,” said Vidal Romero, an analyst at the Autonomous Technological Institute of Mexico, suggesting any kind of measure, including subsidies for poorer people in Mexico, could have made the transition easier. “There is no compensation for citizens.”