Let’s import cheap gas from Mexico.
Posted by Ed C on Saturday, May 26, 2007
The Los Angeles Times reports that Americans are taking advantage of $2.60 per gallon gasoline in Mexico. Gasoline prices in CA are averaging $3.43 and top $4.00 in some places. California resident Roger Moore a 63-year-old management consultant (and obvious government policy and oil industry expert.)
“It costs $65 for a tank of gas up there and it costs me $45 here,” Moore said. “It’s a monopoly and it’s cheaper!”
Before House Speaker Pelosi dusts off her 4/24/2006 speech ‘With Skyrocketing Gas Prices, Americans Can No Longer Afford Rubber Stamp Congress’ and starts advocating we buy cheep gas from Mexico, she may want to read more of the article and take a basic Macro-Economics class:
Turns out that the fuel is not a “clean” as the fuel mandated in California (and because of the Maryland General assembly, coming to a pump near you.) And wait, there is more:
The [Mexican] government regulates every aspect of the industry, including the retail price that consumers pay at the pump. There are two sets of prices: one for stations in select cities along the northern border and another for the rest of the country. Officials tend to peg border prices to those in the U.S. so that Mexican operators can stay competitive with their American counterparts.
But as U.S. gas prices have soared, Mexico’s border prices for regular have remained at 7.41 pesos a liter, or about $2.60 a gallon, for most of the year. Prices in the interior are even lower at 6.88 pesos a liter, or about $2.41 a gallon.
Rising demand is straining Mexico’s refining capacity. In April, the world’s No. 5 oil producer had to import almost 45% of its gasoline, Pemex statistics show. Most of that came from the U.S. But the Mexican government hasn’t boosted retail prices significantly to reflect tight supplies.
So, unless U.S. and other refineries are selling at below market prices to Mexico, the Mexican government is subsidizing U.S. drivers. I wonder if Mr. “Monopolies Are Good” Moore took these other items into consideration:
- $0.447 – CA Gas Tax (Other taxes include a 6% state sales tax and 1.25% county, plus additional local sales taxes and 1.2 cpg state UST fee.)
- $0.184 – Federal Gas Tax
- ? – Cost of meeting CA fuel mixture requirements.
- ? – Cost of doing business in Mexico v.s. CA (for the retailer)
So, if we deduct the $0.631 cpg CA and Federal taxes, the $0.28 (est.) cpg for local and other taxes, the average retail price in California would be $2.58 per gallon – two cents cheaper than in Mexico.
No word if Ms. Pelosi is planning to stop the obscene profits of Big Government and their cronies, the Democratic Party. Just a though as you empty your wallet this Memorial Day weekend.