The cost of gas responds to the behavior of the world market. It doesn't matter if you produce oil or not, the cost isn't fixed by anyone, but rather the international daily exchange of 85 million barrels of crude around the world. Without a doubt countries that consumer a lot, such as the US, or that produce and export a lot, like Saudi Arabia, have a lot of weight in this market, but no one controls it. If a country decides to sell domestically gas at a price beneath that of the world market, that decision has a cost: the taxpayers pay the difference. It doesn't matter how you twist it, that's the way it is.
Monday, July 18, 2011
I've often thought the use of the term "gasolinazo" to describe the government-mandated increases in gas prices is pretty ridiculous, given that Mexico must interact with the world market and gas prices tend to go up in the long term. Macario Schettino dug into that issue last week: