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Gasoline & Diesel Prices in Mexico & Baja - The PEMEX Monopoly is Broken

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Gas Prices in MexicoUpdated August 2, 2014 For the first time in memory gasoline may be cheaper in San Diego than in Tijuana and all of Mexico. And you still have to wonder how much you of a liter you are actually getting for that price.

Each month of 2014 the first Saturday of the month will see increase across the board of 11 centavos to bring Mexico's fuel prices in line with the rest of North America. But for Baja customers the big jump will came January 1, 2014 when Baja IVA is increased to 16%. This will amount to a 59 centavo increase per liter or about a 17 cent (USD) increase per gallon.

The Monopoly Comes to an End.

Probably the biggest news in terms of fuel in Mexico hasn't yet hit the pumps. 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.

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. That would make the in tank price of regular gasoline on January 1 as much as a $4.21 a gallon.

Pemex PricesTo 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)

Other Baja Driving Requirements

Editor's Note:

1) As of January 1, 2012 Proof of liability insurance is required in Baja California

2) As of January 1, 2011 Talking on a cell phone while driving is illegal in both Baja California and Baja California Sur it is a +$800 pesos fine in BCS.

3) Use of Seatbelts is required in both states.

4) As of October 1, 2013, proof of liability insurance will be required in Baja California Sur. The fine will be about $2600 pesos.

5) As a dog owner this one shocked me: Pets must be caged or restrained when in a passenger vehicle. It will be applied as an 'add-on' ticket. The fine is about $2000 pesos.

Click here to obtain Mexican Auto Insurance from one of our reputable providers

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

Pumping gasThere are no refining facilities on the west coast of Mexico to produce gasoline refining of any type in Baja. In the late 1930's, when Mexico nationalized the oil production business, a bone was thrown to the U.S. oil companies in that no gasoline refining would be done in Mexico. In June of 2010 construction began on the first new refinery in Mexico in more than 30 years. The facility would begin reducing the need to export crude oil then re-import it as gasoline.

Since December of 2012 there has been a series of monthly prices increases of 9 to 11 centavos per liter. The price for filling the average gas tank will rise by about $190 pesos per tankful.

PEMEX fuel prices for gasoline and diesel in all of Mexico (except Mexico City where additional local taxes apply) as of August 2, 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 but the government has chosen to allow for higher prices in some northern border areas of Mexico because of the Americans that are coming over the border to purchase gasoline and diesel at a very large discount relative to the U.S. prices.

Price of Gasoline & Diesel in Baja as of 08-02-14

 
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

$12.95

$3.75

$3.457

$3.890

$3.49

Premium - Rojo

$13.68

$3.95

$3.829

$4.092

$3.69

Diesel

$13.50

$3.91

$3.819

$4.103

$3.79

* calculated at the rate of 13.05 pesos per dollar ~ US/CA Prices from AAA 08/17/14 ^San Diego prices 06/06/14

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