Friday, January 2, 2015

Today's headlines: Checked out the price of gas lately?

Mexicans nationwide (almost) were greeted with a hike in gasoline prices at one second after midnight on New Year's Day. The reaction was muted. People are used to big new numbers at the pump and in the supermarket aisles each January 1, and the 1.9% rise in the cost of gasoline is actually less than expected. Which raises the question of why Reforma put this headline over its story: “Mexicans pay 70% more for gasoline.” The short answer is that you sell more newspapers with “70%” than with “1.9%.” The factual explanation is that the new set price per liter doesn’t apply along the border. There, gas is pegged to U.S. prices, which these days are considerably lower than in Mexico. So while you're paying 13.57 pesos per liter for regular unleaded (“Magna”) in most of the country, you're only paying 7.97 pesos per liter if you’re filling up in Reynosa or Matamoros. In rough figures, that’s $2.50 dollars per gallon along the border compared to $3.50 in the rest of the country.
    The real story, though, is in Milenio’s leader: “Yes, there may be more gasolinazos: SHCP.” Coinages with the useful suffix “-azo” indicate a blow delivered by the root noun, in this case gasoline prices. The Finance Secretariat (SHCP) sets the top price that can be charged at gas stations, all of which are affiliated with the state-owned oil company, Pemex. What we’re being told, then, is that there will likely be more price hikes — more gasolinazos — throughout 2015. Which is a more worrying prospect than a one-time New Year's adjustment.
    The reason for the expected raises is not so much predicted inflation as the global fall in oil prices. While much of the world enjoys lower prices at the pump, an oil-exporting nation such as Mexico, with a state-owned oil monopoly, has to make up for lost revenue. And who better to get it from than residents, who have no alternative to the higher prices other than moving to the border or hoping that the upcoming implementation of energy reforms will push prices down as promised? They can cross their fingers, but they’re not holding their breath.

All five major dailies lead with business- or economy-related news, none of it encouraging. La Jornada informs that “Household income hasn’t grown since 1992.” The source is a year-end study from Coneval, a federal agency that evaluates social development policy. The report also reminds us that over the last two decades, average annual GDP growth has been an anemic 1.2%. Excelsior cites a report from UNAM, the national university, revealing that “121 security firms are irregular.” “Irregular” here has nothing to do with Baker Street. It’s a euphemism for illegal. Most of the unregulated security businesses are run by ex-cops, and are essentially thugs for hire. A cynic can argue that whoever contracts an off-the-grid protection service deserves whatever ill befalls him or her, especially since there are 854 other firms that are on the up and up.

El Universal and Reforma both lead with stories about Ficrea, the financial institution that defrauded thousands of investors out of billions of pesos. “U.S. investigating Ficrea owner for money laundering,” is the El U head. Rafael Antonio Olvera Amezcua and his wife Susana Silva Tortolero have been involved in real estate deals in a number of U.S. states, likely with stolen money. That’s caught the attention of the U.S. Justice Department. And with the lead head “Ficrea defrauded Coahuila” Reforma reveals that the Mexico City Superior Court (TSJDF) wasn’t the only public entity ripped off by Amezcua’s company. The border state government had invested 92 million pesos (about $6.5 million dollars) out of a fund used for staff training and infrastructure improvement.

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