The Price of Stopping Theft: The Mexican Gas Crisis


Protecting Fuel Lines

In President Andrés Manuel López Obrador's search to combat fuel theft from gas pipelines, he also prevented millions from legally buying fuel. 
According to the Mexican president, Huachicoleros, or gangs that steal gasoline from pipelines, stole $3.14 billion worth of fuel last year. Huachicoleros have created an alternate market to the more expensive gas prices in urban areas. Stolen gas might bring up images of a sketchy black market but in reality, sometimes the entire community is involved with, and the majority are aware of, the theft. In states like Puebla or Guanajuato, members of the military/police, normal citizens, and corrupt employees of the gas companies all work to siphon gasoline. 
The government crackdown on gasoline has actually increased siphoning. In protest to the new policy, the pipeline running to Mexico City was sabotaged, reducing the amount of gas available to the public via gas stations. Both the President and Energy Secretary maintain that the shortage is not due to the actual amount of gasoline available, but rather due to the inability to bring in/transport petrol. In other words, "the shortage is due to logistics rather than a lack of supply" (Mexico News Daily). The President has ordered the gas to be transported by truck, surrounded by armed guards instead of using susceptible lines. This process is less efficient; it takes far longer and the gas is transported in smaller amounts. 

The situation in Mexico shows the panic that occurs when there's a higher demand than supply. While there is gasoline, it just isn't accessible. 

How has transporting gas by truck affected the economy?

At least of 10 states are currently affected in Mexico. In preparation for rationing of gas, the mayor of Tepic has limited gasoline to police cars and sweeper trucks. Surprisingly, the cost of gas in Mexico hasn't gone up-- it's gone down. Former President Nieto had previously raised gas prices in January 2017 and faced public backlash (some say it contributed to the party's demise). While prices are now lower, the amount of gasoline currently available for purchase to the public is also low. By attempting to save money by preventing thefts, anyone relying on transportation is paying the price.


Without gasoline, gas stations are closing. The leader of Mexico's employers' association, Coparmex, said that a survey of 3,500 businesses had found losses of more than $60 million.

Other effects

In addition to the more direct effects on the economy, there has been a growing number of absences from school and work as people don't have gas for public buses and personal cars. Another concern is of food transportation, and whether or not trucks will be able to continue supplying and moving it from state to state. Mexican farmers might miss out on a lucrative season. Additionally, the inability to move large amounts of crops might impact us in the United States. 100,000 Mexican avocados were consumed the week of the Superbowl alone. Without gasoline for trucks, how else will our avocados make it in time for our Superbowl guacamole? 






























































Sources
https://www.bbc.com/mundo/noticias-america-latina-46805078
https://abcnews.go.com/International/wireStory/mexican-fuel-shortage-stretches-week-60351341
https://www.nytimes.com/2019/01/11/world/americas/mexico-gas-crisis.html
https://mexiconewsdaily.com/news/gas-shortage-reaches-nayarit/
https://www.cnn.com/2019/01/10/americas/mexico-gasoline-shortage/index.html

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http://sanmigueltimes.com/2019/01/gasoline-shortage-spreads-throughout-mexico-and-even-hits-airport-sector/

Comments

  1. AnonymousFebruary 2, 2019 at 9:29 PM

    This was a super interesting topic to read about, especially as you listed out the effects that this Mexican Gas Crisis might have on the United States. The notion that one country's troubles might harmfully affect another country highlights the idea of trade-dependent countries. Upon further research I came to a source that talked about the potential risk of this dependency. When one country goes through social or economic reform, it can shift its trade, and thus another country's food security. In this case, with Mexico going through political troubles over gas siphoning and stealing, it might cause trade with the United States to be limited or even stopped as Mexico works to re-establish their own gas supply. In addition, as interdependence between countries rises, it could lead to potentially devasting consequences if one country goes through massive change. For example, it could lead to higher food prices, social unrest, or even poverty and hunger. Overall, it's a really important topic to think about as our world becomes more interconnected.
    Source: https://www.sesync.org/blog/trade-dependent-countries-at-risk

    ReplyDelete
  2. Anny T.February 3, 2019 at 6:00 PM

    It is extremely important to note how the economy of other countries are affecting others, including our own country. Due to trade, the world is much more interconnected which makes everyone share anxiousness about each other's problems like this one. I thought it would be interesting to apply this article to opportunity cost. The average person in Mexico uses the natural resource. Some are even directly impacted by the President's decision to limit the usage as their jobs are on the line. The shortage has caused gas stations close, businesses reliant on fuel for transportation have suffered, and millions in losses have been reported. However, the President believes that the implementation of the government retaking over the market will be an investment worth taking the risk for, as the costs so far (3.14 billion) have pushed the government to the limits. Currently, it is quite chaotic for the Mexican population, but the dissatisfaction fails to outweigh the government's mission to fix the theft issue. Here, the opportunity cost is the satisfaction by the population and many jobs in return to fix a broken system.
    (https://www.nytimes.com/2019/01/11/world/americas/mexico-gas-crisis.html)

    ReplyDelete
  3. AnonymousFebruary 3, 2019 at 8:01 PM

    I really enjoyed this post and learned a lot about the ongoing crisis in Mexico! It seems like while this is having a huge impact on Mexico, the intent is one that is meant to help the people. The main issue with the policy was that it was put into place very abruptly and the Mexican people were not prepared for the sudden loss of oil. This created the current situation we see right now with huge lines and a decrease in transportation. It really brings the question of what else could have been done and if there is a solution to fuel theft that would not cause a similar situation to the one we see right now.

    Source : https://www.latimes.com/world/mexico-americas/la-fg-mexico-fuel-20190112-story.html

    ReplyDelete

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