Mexican citizens angered at the hefty January 1 increases in the price of gasoline staged multiple demonstrations in both Guadalajara and Chapala this week, with police in the state capital using tear gas to disperse one group of protestors outside the San Juan de Dios Market Monday.
The protestors targeted much of their rage at the Institutional Revolutionary Party (PRI) and President Enrique Peña Nieto, who three years ago vowed that “gasolinazos” (sudden, steep gas hikes) would be a thing of the past after Congress rubber-stamped his polemic energy reform initiative.
The rage has been widespread – and sometimes violent – across the country. Groups of protestors have blockaded gasoline stations, major highways and Pemex installations, and disrupted deliveries of fuel. In some instances, the demonstrations have gotten out of hand – several supermarkets in Mexico State were violently ransacked, resulting in more than 400 arrests. Even supermarkets in Guadalajara posted extra security personnel this week in fear of similar incidents.
As the week unfolded, federal government officials continued to justify the gasoline hikes of between 15 and 20 percent, amid criticism from all sides of the political divide and diverse sectors of civil society. Many PRI state governors joined private sector leaders in slamming the increases as “punitive” and potentially damaging to the country. Nonetheless, Finance Secretary Juan Antonio Meade insisted that maintaining government subsidies that keep gas prices at “artificial” levels is an unsustainable long-term policy and will only hurt the budgets of social assistance programs if allowed to continue. Luis Mata Bracamontes, the Jalisco delegate of Mexico’s Interior Ministry (Gobernacion), said Thursday that although the measure is “harsh,” there is no alternative to “maintain economic stability” and that the current “psychosis” has been fomented on social media without full analysis of the facts.
The Mexican government’s decision to stop setting the price of gasoline is a key part of its deregulation reforms designed to reduce the monopoly of the state-owned oil giant, Petroleos Mexicanos (Pemex). Scrapping subsidies and “liberalizing” the price of fuel in Mexico in line with the international market will spur private investment in the underfunded energy sector, Peña Nieto and Meade both believe. The benefits will be seen over time, they insist, and gas prices will soon start to fluctuate, as in most other countries.
However, the repercussions of the sudden gasoline hike, both socially and politically, are likely to be severe.
The increase in transportation costs will inevitably push up the cost of basic goods and services, economists say. Shoppers at street markets and small grocery stores have already started to complain that food prices are starting to rise, although these increases have yet to be reflected by the major supermarket chains.
Several industry chambers – including representatives of bread and tortilla producers – have hinted at price increases of between 20 and 30 percent.
Some bus drivers in Guadalajara staged a lightning strike Thursday, while owners called for fares to be raised immediately from seven to ten pesos. Jalisco government officials have agreed to investigate the possibility of subsidizing public transport in the short-term to avoid raising fares.
The unpopular gas hikes have galvanized opposition parties throughout the country, an ominous sign for the PRI, which faces several tough state elections this year, as well as a tricky presidential contest in 2018. The leader of the left-wing Party of the Democratic Revolution (PRD) called on Mexicans to stage a “peaceful revolution” against a “treacherous government.”
“We won’t forget when we vote,” was a popular phrase scribbled on posters displayed at protests this week. Already at rock bottom in the polls, Peña Nieto could be leading the PRI to a catastrophic defeat in two years’ time, some analysts suggested this week.
The PRD and Morena – the left-wing party led by former presidential candidate Andres Manuel Lopez Obrador – stood alone against Peña Nieto’s energy reforms and have consistently argued that the sovereignty of Mexico’s oil must never be compromised. Opinion polls indicate a majority of Mexican citizens agree with them.
Politicians from the Citizens Movement (MC) – the strongest opposition party in Jalisco – seized the opportunity to grab the moral high ground as the anger over the gas hikes simmered.
“We’ll raise our voices and won’t let the PRI get away with this,” tweeted Zapopan’s MC Mayor Pablo Lemus. He urged Peña Nieto to eat humble pie and backtrack on the decision, saying history would otherwise remember him as a president who was “never on the side of the people.”
Although the marches and demonstrations in the Guadalajara metropolitan area this week went off largely without incident, State Government General Secretary Roberto Lopez Lara urged citizens to refrain from public expressions of discontent that could lead to violence.
His call came after Jalisco Attorney General Eduardo Almaguer blasted Guadalajara’s MC Mayor Enrique Alfaro, whom he accused of “collaborating with the provocateurs.” Almaguer said Guadalajara municipal police officers stood back and watched as demonstrators threw bottles and bricks and committed public order offenses during a protest held outside the San Juan de Dios Market on Monday. Only when state riot police intervened with tear gas were several arrests made and the demonstrators dispersed.
Lopez Lara said Jalisco Governor Aristoteles Sandoval has already had briefings from federal tax and senior Pemex officials regarding the hikes and promised that the dialogue would be “ongoing.” He said Sandoval’s cabinet will be assessing the situation and looking at ways to mitigate the effects of the hikes on citizens and businesses.
Along with others, MC state legislators have demanded that the government substantially reduce the Impuesto Especial sobre Producción y Servicios (IEPS) tax that is charged on all retail fuel sales. This tax accounts for around one-quarter of the cost of gasoline and will enrich federal government coffers to the tune of 73 billion pesos ($US3.4 billion) under this year’s new pricing structure.