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Good for Middle Class Drivers
Duncan Wood, a Mexico expert at the Wilson Center think tank in Washington, agrees that the subsidies will not benefit all Mexicans in the long term, but is instead benefiting middle class Mexican drivers and foreigners right now.
“Mexico is subsidizing gasoline prices using government revenue which essentially means that, for every liter/gallon of gas that a U.S. motorist buys south of the border, the Mexican taxpayer is subsidizing an American resident,” Wood says.
“When we consider the scale of the subsidy for the Mexican government, this becomes a real issue. As the price of oil gets higher, the losses to the Mexican government become higher.”
According from data to Mexican think tank IMCO, at a price of $70/barrel, the Mexican government will see a net loss of around 120 billion pesos (around $6 billion), more than the Mexican military receives each year.
If the price hits $100/barrel the losses would get to over 200 billion pesos.
“This will result in a severe drain on public resources at a time when Mexico has seen its debt ballooning,” says Wood.
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How to Save Money on Gas
Here are some tips from AAA to help you save some money at the pump.
- Keep your tires properly inflated. Underinflation reduces fuel economy.
- Slow down and drive the speed limit. On the highway, aerodynamic drag causes fuel economy to drop off significantly as speeds increase above 50 mph.
- Avoid “jackrabbit” starts and hard acceleration. These actions greatly increase fuel consumption.
- Avoid extended idling to warm up the engine, even in winter. It’s unnecessary and wastes fuel.
- Minimize your use of air conditioning. Even at highway speeds, open windows have less effect on fuel economy than the engine power required to operate the air conditioning compressor.
- Also, shop around for gas prices, sometimes lower prices are around the corner.
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