Bloomberg — Ivan Escogido is suddenly seeing gleaming BMWs, eight-cylinder Chevrolet Suburbans and luxury Lincolns stopping to fill up, paying in dollars, some proffering American Express cards. For Escogido, who pumps gas in the Mexican city of Ciudad Juarez on the Texas border, this is a reversal of everything he’s known.
“For their whole lives, people from here -- businessmen and everyone else -- have gone to buy gas in El Paso,” said Escogido, 37, referring to the Texas city over the border. “Now the tables have turned.”
With a Mexican gallon a dollar less, gas sales in Ciudad Juarez were 52.6% higher in May than a year ago. Most of it is imported from the US, which is the single largest seller of refined petroleum products to Mexico.
As the world and the rising Latin American left have embraced a green future, Mexico President Andres Manuel Lopez Obrador has seemed to some like a dinosaur -- building a huge over-budget refinery in his native Tabasco and investing heavily in Petroleos Mexicanos, his state oil company, the world’s most indebted.
And yet there he was, the populist leader known as AMLO, poking President Joe Biden at the White House the other day, telling him that he’d generously welcome American drivers to come fill up. He offered to double the supply to border gas stations to help Biden while lawmakers consider the US president’s call to suspend fuel taxes. He said Mexican pipelines could provide fuel to California, Arizona, and New Mexico.
As nations across the globe scramble for energy in the face of a pandemic supply crisis, extreme weather and the Russian war on Ukraine, Mexico -- at least, right now -- is sitting pretty.
And although Lopez Obrador is a leftist, he’s being briefly hailed by some on the right in the US who want more drilling and love seeing Biden squirm.
It has been a boon for AMLO at his daily press conferences. The increased tax breaks and subsidies that his government put into place for both customers and companies will cost an estimated $24 billion this year, but officials say they’ve been able to cover the price with revenue from crude oil sales.
Gas prices topped $5 a gallon in the US in June and though they have dipped since, people who drive across the border say they don’t remember a time when Mexican gas was so much cheaper. What costs $3.11 a gallon in Escogido’s station in Juarez goes for $4.03 in El Paso and $5.78 in Fresno.
And people are coming even though some stations have a reputation for scamming clients.
“There’s no gas station in all of Mexico that gives you a full liter for every one they charge,” said Manuel Alfredo Aguirre, 53, astride a Harley-Davidson motorcycle. “Even so, there’s no beating the price.”
One Texas woman filling her tank said her family told her she had to buy gasoline in Juarez, blaming the price difference on Biden’s failures. A New Mexico construction worker with a disability tag swerved into the station after dropping his adult daughter off. A man shielding his eye from the sun because he’d come to Mexico for eye surgery handed a few bills to the attendant. These folks didn’t drive over just for the gas; they had a reason to be here but made it a point to find a pump.
The northern border states were never Lopez Obrador’s biggest voter base but lower gas prices could be helping him now. The question for the government is whether the wind in Pemex’s sails — and the boost to its own reputation — will be worth it in the long run.
“Governments change, wars change, illnesses change, but all of that is outside my control,” said Faustino Alonso Maldonado, who oversees 79 gas stations in Juarez for Grupo Gazpro, a Pemex affiliate. “Crises are a time of opportunity.”
