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Gasoline, Diesel & Propane Prices in Baja - Tank-up in San Diego!

Pemex
Updated December 8, 2014 : Gasoline has taken its final price jump for 2014. With the declining value of the peso for tourists, the price of gasoline fell dramatically for travelers last month. But for those of that live in pesos, the price is now equivalent to just over $4 per gallon for regular.

But the biggest jumpis yet to come come January 1, 2015, when fuel prices will jump 3% across the board. Despite the falling price of crude world wide, due to increased production from Saudi Arabia, Mexico's cash margin for domestic Pemex products continues to rise.

On December 1, 2014 Baja propane prices also rose to a national high. A kilogram of propane is now the most expensive in Mexico at 15.90 pesos per kilo, .

Another increase of 3% or 40-43 centavos on January 1 will be the next and alleged final jump as the last of the subsidies are removd.. This will be the second New Years that will bring a huge jump in fuel prices.for Baja, as January 1, 2014 saw a 5% jump in our Baja fuel prices, as the IVA for the two states was increased from 11 to 16% on almost all sales.

In conjunction with the increasing fuel prices the peso has fallen dramatically against the US Dollar. Now approaching 14.5 to 1 (interbank rate), it is directly connected to the fall of international crude prices. Saudi Arabia is flooding the market with high grade inexpensive crude oil, dropping the commodity price to per barrel lows. Mexico is a petroleum exporter and income is down. In addition to this, the increase in domestic petro costs has slowed the economy, thus dropping the value of the peso and its buying power against US products. Since Mexico is the US's #2 trade partner, this will eventural echo back to US exporters. As this effect continues in Mexico and the US economy grows with cheap fuel we may see the peso crst 14.5: 1 before it gets better.

High Gas PricesThe REAL Price per Gallon

It has always been a question in Baja as to whether or not you are getting a full liter for you buck. I have only on rare occasion found pumps to be pumping a full liter. My most convenient station to home this past weekend proved to be a real chiseler, off by 20%. I was putting into metered cans that I had checked with a 1lt glass lab cylinder, they are off by a tiny fraction. But when I reached the" finishing bell" at 60lts I had a little less than 2.5 20 liter(/5 gallon) jugs. This was at the Palmira Tienda on the road to Pichilingue, directly across from the marina. In effect I would have been paying almost a $1USD more per gallon that the San Diego price. I made them pour it back in the tanks.

The Monopoly Comes to an End.

In July the Mexican congress ended the 76 year monopoly held by Pemex. Pemex, as the state-owned company is known, will maintain 83 percent of the country’s so-called 2p reserves and 21 percent of potential reserves, Energy Minister Pedro Joaquin Coldwell said today in Mexico City. Mexico’s investment in fields will be $50 billion between 2015 and 2018, he said in a presentation of Round Zero, as the non-competitive awarding of fields was called.

The company is looking for partners in 10 projects where it lacks the technical and financial resources to develop fields on its own, Lozoya said. The plans for joint ventures will require investments of about $32.3 billion in the next five to 10 years, he said.

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Pemex chief Emilio Lozoya says Mexico also boasts 460 trillion cubic feet of unexploited shale gas in the rock formations beneath its soil, worth an estimated $2.2 trillion. Energy -policy scholar and consultant Kent Moors says the five major fields identified could produce a “shale frenzy” among private companies. Shale gas exploration has it environmental opponents, and current techniques have been called in to question in Pennsylvania and in Alberta. Hopefully, Mexico's environmental concerns will be able to keep up with the rush to exploit this resource.

The first phase of the market opening is aimed at the exploration and extraction of Mexico's petroleum, the second phase of the legislation, which has yet to be enacted will open the retail sale of gas and diesel to foreign distributors. There is a down side to this as well. Unlike gas prices elsewhere in North America, prices are set nationwide, with the exception of Mexico City where there is a local tax. Once competition is introduced gas prices could rise dramatically to rural areas and particularly the Baja peninsula, where there are no refineries. In Baja California Sur nearly all of our gas and diesel is delivered through the port in La Paz. This could stymie development of these remote areas, making agriculture, Mexico's largest GNP export, uneconomical. Mass exodus to urban areas could occur like happened in the US in the 1930's.

Gasoline Consumption per Capita MexicoFor decades the price of gas and diesel has been subsidized by the Mexican government. In 2012 the subsidy cost over 1.6% of the GNP of Mexico and many are calling for the necessary end to the payments to PEMEX. (pronounced "Pay-mex") Economic analyst point to the dramatic affect on inflation that removing the subsidy would cause, with fuel prices rising more than 28% in one year. Fuel prices have been rising every month since December 2012.

With the increased taxes it is the hope that PROFECO policing of weights and measures will be increased. Less of a problem on the mainland due to greater infrastructure for enforcement, short liters have been a perennial problem in Baja. But with the increasing dependence on the auto in Baja, the rise in fuel costs and increased number of 'immigrants' from both up north and the mainland there is a louder cry for more accurate dispensing of gas and diesel. In his inaugural speech last year, the new jefe for Baja Sur PROFECO (The Mexican Consumer Affairs) promised to crack down on short liter station. A local online newspaper also publishes a regular list of offending short liter stations, some delivering as much as 20% short.

Pemex pumpsTo date no closures have been announced, but PROFECO reiterated the warning in late September 2013. It has become a hot button issue in a city where the number of cars in the road in the last 10 years has more than doubled. The online version of a local news paper published the 10 worst offending stations they could find. If you feel you have been shorted report the station online, email or telephone. The contact information is here: PROFECO Baja California or Baja California Sur)

In light of Mexico's dwindling oil reserves, Pemex contends that Mexico is simply running out of oil. In a recent letter to the lower house of the Mexican Congress, Pemex said the country has only 5 years of proven oil reserves remaining. In 2011 Mexico's gasoline imports rose by a double digit percentage. By 2015 Mexico may no longer have the title of "Oil Export Nation" and since Mexico sells a vast majority of it's current export supply to the US. Stateside prices will rise even further when Mexico closes the valve.

Also see Problems with Mexican Diesel in California Emissions Trucks

PEMEX fuel prices for gasoline and diesel in all of Mexico (except Mexico City where additional local taxes apply) as of Oct 10, 2014 are in the following table. The prices have been converted to U.S. gallons so you can make the comparison easily. The price of gas is supposed to be the same throughout all of Mexico now, with the exception of Mexico City.

For those of us that live in pesos the price rise is even more painful that for those visiting from the north. The $3.51 price per gallon appears better than it actually is, because the dollar has gained strongly against the peso compared standard 12 months ago of 12.9 to one, the exchange is now 14.3 to one. To have an idea how expensive the gas is for those of us living in pesos, let's look at the perspective of the more stable 12.5 to 1 and see that regular would be over $4 a gallon!

Price of Gasoline & Diesel in Baja as of 12-06-14

 
All of
Mexico
Average
US Cost~
California
Average
Best Price
San Diego^
 
Per Liter
in Pesos
Per Gallon
in USD
Per Gallon
in USD
Per Gallon
in USD
Per Gallon
in USD

Magna (regular unleaded) - Verde

$13.31

$3.51

$2.69

$2.99

$2.69

Premium - Rojo

$14.11

$3.72

$3.09

$3.20

$2.89

Diesel

$13.94

$3.68

$3.51

$3.62

$2.99

* calculated at the rate of 14.30 pesos per dollar ~ US/CA Prices from AAA 12/06/14 ^San Diego prices 12/06/14

Although prices are set nationwide what you actually PAY for gas may vary, not on the price, but by the size of the liter you receive. Arguing the point with an attendant by the way, will usually prove fruitless.

Remember tipping your Pump Jockey is customary in Mexico, as it was in the 1950's and 60's in the US. $5-10 Pesos makes their day! (less than a dollar)

Just so you know the Magna which is the regular gas is green (verde) and the Premium is red (rojo) and many people just say the color and fill it up (llenarlo or lleno por favor) please! End

Tomas

Gulf of Mexico Pemex Platforms