Tucson, Arizona Thursday, 25 July 2002
The Associated Press
http://www.azstarnet.com/star/today/20725IMexico-Oil.html
Daniel Anaya tries to lure drivers into a Pemex station in Ciudad Juarez. Gas
is much cheaper in El Paso.
By Julie Watson
THE ASSOCIATED PRESS
CIUDAD JUAREZ, Mexico - Mexico's state oil monopoly is facing an unusual situation in its border cities: It's having to compete for customers.
With regular gasoline selling for about $2.11 a gallon on the Mexican side, the tens of thousands of northern Mexicans who routinely cross the border virtually all buy their gas in the United States. Along the southern border, Mexicans have flocked to Belize to buy its lower-priced gas.
The Arizona border is no different. Gas stations such as the Border Mart Shell in Douglas and Big Art's Chevron in Nogales, Ariz., are heavily dependent on Mexican consumers.
"It's a real big part of my business," said Art Grimm Jr., vice president of Big Art's, about a mile north of the international line. "I don't know the exact percentage. But it would kill a lot of businesses if it went away."
A growing number of independent gas stations have popped up to satisfy the Mexican demand, he said.
"There are more no-names (independents) here than brand- name gas stations," he said.
As local sales plummeted, Petroleos Mexicanos - known as Pemex - reluctantly bowed to the law of supply and demand, slashing prices in May to $1.79 a gallon in Chetumal, a city along Mexico's southern border with Belize, and in Ciudad Juarez, a city of 1.3 million just south of El Paso, Texas.
Sales immediately bounced back in Chetumal after the price cut made Mexican gasoline 3 cents cheaper than Belizean fuel. But sales have stayed sluggish in Juarez, where U.S. gas remains 44 cents cheaper, at about $1.35 a gallon.
Mexican officials cut Juarez's gas prices again in June, to $1.62 a gallon.
The gap between U.S. and Mexican prices has steadily widened since 1995, when the Mexican government started raising the price monthly. At Big Art's, the lowest grade gas is selling for $1.59 a gallon.
Pemex faces no competition in the interior, thanks to a ban on foreign-owned companies.
The government is still raising gas prices nationwide every month - including in Chetumal and Juarez. But officials hope the discount will persuade people to pay a bit more in Mexico to avoid the hassle of crossing an international border.
The Mexican government receives one-third of its income from oil-related sales. The industrialized northern border region accounts for 10 percent of those sales.
"There are no figures of how many Mexicans cross the border (to buy gas), but it could represent thousands of barrels daily," said George Baker, an expert on Mexico's oil industry.
Ken Jones, director of the Center for Economic Research at Cochise College, said he's never tracked Mexican gas consumption at U.S. gas stations, but "it makes sense to come over and do that."
"I would imagine that people come up to the mall here in Sierra Vista, and they're tanking up before they go back."
* Star reporter Jonathan J. Higuera contributed to this report.
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