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Gasoline War in Mexico and the Philippines

Updated on January 8, 2017
Panic for gas
Panic for gas
Mexico City in conflict
Mexico City in conflict
Anarchy because of rising fuel prices
Anarchy because of rising fuel prices

While both countries are thousands of miles apart, they share a similar culture and threat: their governments are increasing a basic staple that hinges on everything - gasoline price increases. While this may not seem like an issue that would ignite a country to end up in serious mayhem among the population as in Mexico, the increases are hitting the meager pocket book.

In both countries, where the average daily wage is close to $4.00 a day, any increase in fuel costs hits hard. The cost of one gallon of gasoline in Mexico is just 65 cents less than Mexico’s newly increased minimum wage, which is now 80 pesos an hour. This similar to the wage in the Philippines for many positions, where earning 300-400 pesos ($6-8) a day is not bad. In the Philippines, President Duterte is trying to push through a bill to repair the country's infrastructure and wants to increase gas costs to 20 pesos (40 cents) per gallon. This would raise the cost to almost $4.00 or 195 pesos. This would be a jump of almost $1.00 a gallon from current prices. The Filipino Senate is calling this effort as one to keep the population in poverty and that is the impact it would have, akin to the Mexican dilemma. With Mexico, the government simply wants to stop its own subsidy of fuel prices, which have kept prices at artificial prices for eons.

Americans know all about this discontent about rising fuel prices. In our past, the pain is felt at the pump and if forces businesses to curtail services and to pass on the costs to consumers. Years ago, when the price jumped from $3 to $4 per gallon, the impact was significant to the whole economy.

However, Mexicans have declared war on this. For many, it means they work all day and must choose whether to buy gas for the car or milk for the family. Residents in all countries know that when fuel prices jump dramatically, the cost of living does also, yet the wages remain unchanged. Near the California border towns, residents have seized Pemex oil tankers to block the refinery entrance, riots have broken out between police and residents and nearly all the gas stations have closed in protest. The stations that are open have long lines of customers. It is not only along the border, but in 19 states within Mexico, the government is facing a growing unrest and protests from residents who are angry. In Mexico City, 9000 policemen were active to quell unrest and lost millions in revenue when 20,000 businesses closed in protest and fear. Some gas stations were torched in protest. Protestors descended on the border dividing San Diego from Mexico, taking control of Mexican Customs and forcing a southbound border shutdown lasting several hours. The traffic to the USA was jammed as Mexicans crossed to get gas, which is ironically, a little cheaper.

While the Trump mandate that Mexico will pay for the new border wall and Mexico has said "hell no" to the idea, perhaps, they are preparing and using fuel taxes to do it?

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