Mexican Gasoline Prices

Gasoline and diesel fuel for road vehicles has been subsidized by the Mexican government for years.  The USA, in contrast, operates ‘open market’ gasoline prices at its pumps.   When the price of oil was lower than it is today, and gasoline in the US was selling for around US$1.20 a gallon, Mexicans would complain vociferously about how much more they were paying for their fuel, despite Mexico being a major oil-producing nation.

Fast-forward a few years and with oil prices now in excess of US$100 a barrel, and the US$4 gallon commonplace in the USA, Mexico’s subsidized gasoline prices are now lower than those in the USA, and some Americans living near the Mexican border are choosing to drive their vehicles to Mexico to fill up for less.

However, the Mexican government called time on the discount party this week, when the Finance Minister announced that his department would be withdrawing the significant fuel subsidy, which is now worth some some US$20 billion a year to the Mexican Treasury.   The subsidy will be phased-out in stages and, by 2010, Mexico will “operate an open market price policy” for prices at the fuel pump.

Presumably, prices will mirror those of the USA once the phase-out is completed, and should fall if world oil prices decline.  In the past, Mexican fuel prices did not rise and fall with world oil market prices.  Instead, the price was fixed nationally and rose slightly each month, subject to a complex formula based on a fuel price policy and inflation.

You can get detailed information about getting around by car in Mexico, including purchasing fuel, on the Mexperience guide to Driving in Mexico