Howard County Maryland Blog

Convention of States in Maryland

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.


6 Responses to “Let’s import cheap gas from Mexico.”

  1. 1.How difficult would it be to allow the oil companies to increase their refining capacities?
    2.How difficult would it be to standardize all gas sold in the US to one formula instead of 30 some ‘designer’ imposed by different state requirements?
    3.How difficult would it be to lower the legal speed limit on interstate highways to 55 mph?

    We have a road that goes to a neighboring city that has a designated speed limit of 55. If you go 55, you are a defacto navigation hazard to other motorists who speed on by. The high gas prices must not matter to them.

  2. Rodney Sturgeon said

    how can purto Rico sell gas below 2.00 a gallon
    what do they do that we cant do?

  3. San Diego said

    We really need to Annex Mexico and take it, they come over in droves,steal our currency and take it back to Mexico all on 2.00 a gal.—-These people hate us as Americans and only want to leech off our wealthy country.

  4. GeneralZod said

    This is a very interesting article. As all the focus is put on ANWAR and other environmental grounds what is being done about the existing land that companies already have leases for?

    “WASHINGTON – Nearly three-fourths of the 40 million acres of public land currently leased for oil and gas development in the continental United States outside Alaska isn’t producing any oil or gas, federal records show, even as the Bush administration pushes to open more environmentally sensitive public lands for oil and gas development.”

    ““Even without additional leasing, if the current inventory of non-producing leases were placed into production, the scale of drilling on public lands would increase dramatically, as would the degradation of lands where drilling is wholly inappropriate,” the report concluded.”

  5. PEMEX is a nationalized company by Mexican Constitution. The oil sector can not be privatized nor accept direct foreign investment by constitutional law. PEMEX’ soul purpose is to serve the needs of the Mexican people.

    40% of government revenue comes from PEMEX – and it is dropping. Mexico is in big trouble in this sector.

    The government has sucked so much money out of PEMEX the oil segment is falling apart. They have run out of refining capacity and don’t even have enough money to explore for new reserves.

    Mexican gas is short term at best.

    Calderon is coming up some creative ways to find investors in PEMEX without violating the constitution or being forced to try to change the constitution. He is a smart guy – he will figure it out.

  6. Currently it looks like Drupal is the best blogging platform out there right now. (from what I’ve read) Is that what you’re using on your blog?
    sos datenrettung

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