Introduction
Mexico is currently facing a severe gasoline shortage, contradicting the official stance of self-sufficiency. Between 50% and 60% of the gasoline consumed in Mexico is imported, including those produced at Deer Park, Texas, which are considered local.
The Reality of Imported Gasoline
Gas stations are closing, and long lines have formed at those that still have fuel. This shortage has created a social perception of scarcity, to which the authorities respond with denial.
Government euphemisms downplay the problem, casting doubt on their ability to address an essential issue for all economic activities.
If it’s true that gasoline exists but cannot be transported, this exposes Pemex’s ineptitude, which seems to be reverting to a failed monopoly scheme.
Mexico does not produce all the gasolines it consumes. Contrary to the official self-sufficiency discourse, 50% to 60% of these fuels are imported.
Logistical Failures and Price Control
The argument of the distribution failure claims that logistics to distribute gasoline from storage facilities faltered, as Pemex decided to maintain both its tankers simultaneously.
If this version is accurate, someone at a high level should lose their job immediately. However, there appear to be deeper reasons for understanding why the Mexico City, State of Mexico, Nuevo León, and Chiapas regions have run out of these fuels.
Government information in Mexico is as scarce as gasoline, but several factors could explain the severe failure in one of the most fundamental economic chains.
Mexico’s populist tendency has fallen into the trap of controlled prices, with the Magna gasoline having a price cap that inevitably distorts the market.
Among the multiple damages caused by this controlled price are the costs to the treasury, as well as Pemex Logistics’ reported “unprecedented” damage of over 12,000 million pesos in the first half of this year due to having to transport fuels without reflecting costs on the final user.
Another possible reason is the impact on what’s called “fiscal bootlegging,” and the slowdown in importing gasoline through these illegal channels. Again, information is scarce in Mexico, but a country with low gasoline reserves may experience effects on fuel availability due to these positive events.
It’s a fact that this neo-statist regime has imposed obstacles on private companies to expand their activities in the gasoline production and sales chain.
An additional cause explaining the current fuel shortage is Pemex’s enormous debt to its suppliers, affecting all activities related to this business, from drilling a well to maintaining a pipeline.
The Impact of Denial and Lack of Information
The government’s shenanigans to avoid talking about scarcity only erodes confidence in their capabilities, and the lack of gasoline is a catalyst for serious problems.
Key Questions and Answers
- Q: What percentage of gasoline is imported in Mexico? Between 50% and 60%
- Q: Why is there a gasoline shortage in certain regions? Logistical failures, price control distortions, and Pemex’s financial issues are contributing factors.
- Q: How has the Mexican government responded to the shortage? With denial, which erodes confidence in their ability to address the issue.
- Q: What are the consequences of controlled gasoline prices? Market distortions, increased costs for the treasury, and logistical challenges for Pemex.
- Q: How does Pemex’s debt affect gasoline availability? It impacts all activities related to gasoline production and sales, from drilling wells to maintaining pipelines.
