Running on Fumes: Pandemonium at Mexico’s Gas Pumps
One week into 2017, and Mexico is already descending into chaos.
ROSARITO, Mexico—A week of protests in Mexico has devolved into looting, vandalism, and violence after a double-digit increase in gas prices that landed with a bang as the New Year began.
On Saturday, hundreds of protestors descended on the border dividing San Diego from Mexico, taking control of Mexican Customs and forcing a southbound border shutdown lasting several hours. Thousands of Mexicans returning home from California were forced to turn back toward the U.S. and seek out alternative border crossing points. And that was neither the worst nor the end of it.
These increasingly violent protests did not begin because of “The Wall” that U.S.-President-Elect Donald Trump will ask Congress to fund (for now), but they will certainly have an impact on the border he says he wants to defend. And the more he pressures Mexico economically, the worse it’s going to get.
Through the week, roads across Mexico were blocked by protesters and burning tires, thousands of businesses were ransacked, upward of 1500 people—among them, police officers— were arrested, and at least five people were killed as furious citizens took to the streets following the more than 20 percent price gas hike.
The Mexican government has for years maintained artificially low gas prices in Mexico thanks to massive subsidies that are absorbed by the state, but as of this year that all changes. The cost of fuel will finally be adjusted to conform to real market value. The surge in gas prices is the just first major sign of changes to come, but certainly the most tangible so far.
And Mexicans, clearly, are not happy.
Dozens of videos have appeared online showing mass looting across the country in response to the gasolinazo, as the gas price surge is called—from Sinaloa and neighboring Puebla and Mexico State, all the way to the southernmost state of Chiapas, which shares its border with Guatemala.
In Chiapas, a mob of protesters freed half a dozen—likely Central American—migrants who were being held at a detention center on Wednesday. The demonstrators then set the immigration control center on fire before ransacking nearby stores.
In Veracruz, Governor Miguel Angel Yunes tried desperately to call for order at a local shopping center on Thursday, after a restive mob pillaged multiple businesses. He offered would-be thieves coupons for 500 pesos, roughly $23, “to buy food” if they desisted.
“Veracruzanos are not thieves,” he reminded the people of his state, the second most impacted by this week’s unrest. “I am as upset as you are about the gasolinazo issue, but this is not the way to demonstrate.”
In Mexico State, where the highest number of violent looting incidents have been reported, protesters reportedly tried to set a gas station on fire on Tuesday, hurling Molotov cocktails and shouting “blow it up already.”
On Wednesday, police officers in the state were caught on video filling up patrol cars with ransacked merchandise. Four officers have been fired and arrested as a result. But store owners armed themselves with sticks and metal rods in preparation for looters who still may come.
The Mexico City Chamber of Commerce blamed protesters for millions of dollars of revenue lost in the capital earlier in the week after roughly 20,000 businesses shuttered due to fear of violence. And upward of 9,000 police officers have been deployed just in Mexico City to quell this week’s chaotic protests.
Despite dozens of altercations and incidents, many of the protests—held outside gas stations, rundown refineries, municipal buildings, and on highways and in city squares in at least 19 states across the country—have been peaceful. Others, which began peacefully, are now turning for the worst, as tensions between authorities and citizens peak.
The president has called the gasolinazo, as the price increase is known, a “necessary measure,” but thousands of demonstrators in Mexico have resoundingly rejected the price increase, calling for renewed subsidies and slashed gas prices.
South of the California border, dozens of protesters in Rosarito managed to seize control of nearly a dozen tanker trucks this week, which they used to block access to the roads used by employees of Petróleos Mexicanos, or Pemex—the historically state-owned oil monopoly—to access the city’s large energy plant. Roughly 200 protesters stationed at the beach town entrance since Monday peacefully demonstrated and collected signatures during the week.
But this weekend, those peaceful protests took a turn for the worse, as more than half a dozen federal police officers and protesters were run over by a demonstrator, who rammed his pickup into a small crowd of anti-riot police Saturday as protestors hurled large rocks at the authorities. Several journalists covering the disruption were beaten by authorities and arrested as a helicopter flew overhead searching for the fugitive demonstrator.
When I spoke to the protesters on Thursday, prior to the violence, they emphatically said they wanted to demonstrate pacifically, and were completely opposed to the looting and violence seen across the country.
“We had seized 10 gas tankers, but then we had a talk with the employees at Pemex and returned almost all of them due to safety concerns,” said a young part-time grocery clerk named Jonathan standing in front of two hijacked Pemex refueling trucks earlier in the week. Etched in the tankers’ dusty sides were slurs directed at the Mexican president and loosely scrawled anarchist symbols.
By Thursday, those demonstrators had returned all but two of the tankers to Pemex “as a peace offering.”
“We kept the empty gas trucks, but gave the rest back because we didn’t want anyone going near the full tankers smoking a cigarette, or something,” said Jonathan. “It’s too dangerous.”
This same group of demonstrators spread their message throughout the week by seizing toll booths on the nearby highways connecting Rosarito to Tijuana and the rest of Baja California, taking over the facilities and allowing dozens of vehicles to pass through for free.
“About a dozen cars full of people [would] block the toll road, and when the window attendants saw us coming they let us take over. They lent us their chairs because we are being peaceful and not disrupting anything,” the protester said, adding that they gave back one of the toll booths “after some people lost focus of the objective and starting drag racing.”
Lucia Vazquez, a retiree who volunteered to collect signatures, said on Thursday that a few thousand people had signed their petition, which they hoped would put pressure on the federal government.
“They say that the economy is different here and that we don’t have any poor people. But we do, and this affects us all. The cost of everything is going to go up—food, public transportation—and it hits us the hardest in the north of the country,” Vazquez said.
The plan to completely free up fuel prices in Mexico will continue in phases across the country from north to south throughout the year, until finally reaching the market rate in December of this year.
But the steep price increase will impact the poorest harder than anyone. The cost of one gallon of gasoline in Mexico is now just 65 cents less than Mexico’s newly increased minimum wage, which is now 80 pesos—or about $3.75 for a full day’s work.
So, for some Mexicans this means that they can work all day and then be forced to chose between buying a gallon of gasoline or a gallon of milk, with not enough left over for a half-dozen eggs in either scenario.
The situation in Mexico overall is dire, but fuel prices are the drop that makes the glass overflow.
To make things worse, the Mexican peso fell to a new historic low this week, surpassing its previous record low set in November following the victory of incoming President Donald Trump, whose every utterance it seems causes flurries of economic panic in Mexico.
Trump has repeatedly insisted he will use remittances to “build a big, beautiful” border wall, pull out of NAFTA, and punish U.S. companies looking to send jobs to Mexico by imposing hefty tariffs, putting billions of dollars in cross-border trade at risk.
Still, the ripple effect of actions taken this week by even common folk in Mexico are having a profound impact.
Because of the demonstrators I spoke to in Rosarito, blocking access to the main Pemex distribution plant, at least 25 gas stations in the neighboring city of Tijuana, which shares its border with San Diego, were without fuel on Thursday. By Friday, the number of closed stations had climbed above 120. And by this weekend, Rosarito and Tijuana were without gas as cars began to line up at some closed stations, hoping to be the first in line when fuel eventually comes in.
The violence unfolding this weekend came as authorities attempted, unsuccessfully, to free up the roads used by Pemex, so tankers could resupply gas stations in Tijuana and Rosarito.
In the state capitol, protesters also controlled Mexicali’s refuelling stations this week, freezing fuel distribution in cities across northern Baja.
Retired Americans living in beach towns throughout Baja shared their tips for finding gas on social media, and residents in Tijuana begged their friends for info on open gas stations, hoping to have enough gas to make it to work, or the border. Similar conversations unfolded in cities all over Mexico.
All along the northern border, hundreds with dual citizenship opted to go for gas runs in the United States, driving across the line where—despite the crippling exchange rate—their dollars would stretch just a bit further. On Facebook, thousands in Mexico shared tips on which gas stations were closed, which streets to avoid, and estimated wait times at gas stations that remained open.
Still, many were left homebound.
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It’s not just the fuel prices. Sweeping fuel shortages threatened to cripple the economy in dozens of Mexican cities in the last week of 2016. These were attributed to everything from widespread, organized criminal fuel theft, to breaks in the supply chain, increased demand, and the measures taken following energy reforms ushered in by President Enrique Peña Nieto, who pushed to privatize Mexico’s historically State-owned—yet crippled and deteriorating—energy industry.
Oil theft enriches Mexico’s criminal cartels and lone wolf gas thieves to the tune of $1 billion a year, but this week people across Mexico accused the government, not the gangs, of ripping them off.
The president shied away from the thought that his controversial energy reform was responsible for the gas prices, instead blaming an almost 60 percent global increase in petroleum costs for the steep hike.
For those wondering why an oil-rich country would be affected by global rates, Mexico now imports more than 60 percent of its fuel, after having allowed its refineries to severely deteriorate through years of unwillingness to increase spending for infrastructure in the oil sector.
Pemex released a graphic, on New Year’s Eve prior to the price adjustment justifying Mexico’s lack of functioning refineries, claiming that it “is more convenient to bring gasoline from where it is cheaper, to save resources.” The real problem, they claimed, lies with the lack of storage facilities and transportation.This dysfunctional system, which has been artificially propped up with massive government subsidies, is now finally coming into the public eye as a result of the changes brought in by the reform. That is inarguable.
“Trying to maintain the artificial price of gasoline would have forced us to cut social programs, raise taxes, or increase the country’s foreign debt, placing the stability of the entire economy at risk,” President Enrique Peña Nieto said Thursday night, addressing the nation.
But, as one follows the bouncing ball back around, Mexican Finance Minister José Antonio Meade explains that continuing gas subsidies would have cost the government $9.3 billion in 2017, an increase from the nearly $5 billion spent last year.
But, still, nowhere near the damage seen in recent years. As the barrel price of oil soared in 2012 to nearly double today’s value, so too did subsidies in Mexico, which came to a whopping 223 hundred billion pesos in 2012—more than $17 billion when adjusted to today’s exchange rate.
While unwilling to acknowledge his administration’s role in the price surge, or stoically defend his revolutionary energy reform—which few would argue was unnecessary—the president coyly blamed rising global oil prices, apparently as a way to mitigate the severe criticism leveled against him.
“What would you have done?” the president asked the country, meekly, in his evening address, in what quickly became a national meme and trending topic.
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Unlike other crises seen in recent years such as the months of fiery protests that erupted following the mass disappearance and almost certain execution of 43 teaching students in Guerrero in 2014, this may be the most important period of civil unrest in recent memory in terms of economic impact.
In front of a road blocked with seized fuel tankers in Baja, protesters who claimed no political affiliation handed me a leaflet explaining their discontent, in days before the conflict with authorities. It was printed by Mexico’s Communist Party.
“Down with the powerful monopolies!” the pamphlet read, ironically protesting the side effects of Mexico’s attempt to do away with its historic energy monopoly by calling for a return to the same state-monopolistic practices that led to the current crisis.
One similarly ironic sign of things to come in 2017, following Republican populist Donald Trump’s surge toward the White House, is the renewed rise in Mexico of leftist populist Andrés Manuel Lopez Obrador, who has lost two presidential elections since 2006 but is now favored to win the 2018 elections and become the next leader of the Mexican people—81 percent of whom believe Donald Trump is a direct threat to Mexico.
Lopez Obrador famously held up an upside down photograph during the 2012 presidential debates in a gaffe that made him the butt of instant ridicule.
But there was nothing amusing about the photograph, which showed now-President Enrique Peña Nieto seated with Mexico’s favorite villain, former President Carlos Salinas de Gortari, whose family has been caught moving hundreds of millions of dollars through Swiss bank accounts after pilfering them from the country.
In February, Peña Nieto appointed Salinas’s brother-in-law, José Antonio González, to be the director of Pemex.
“It’s the world, upside down,” the twice-failed presidential hopeful quipped of the upside down photograph. “Look.”