State/National/WorldEl Reporte

Mexico fuel price up 3 percent, but Peso down

Boaters can expect to pay a little more for a gallon of diesel in Mexico this year than they paid last year, but the exact amount depends on where and when you fill up.

On Jan. 1, 2015 the base price for all Pemex (Petroleos Mexicano) fuels was increased by 3 percent across the board, a big change from last year, when weekly increases were limited to a mere 7 centavos per liter.

In February, when I surveyed 20 marina fuel docks in Mexico and the United States, some fuel docks in Mexico were selling diesel for as much as $1.09 per gallon more than those in Southern California.

There are two reasons for the increase: (1) the U.S. enjoyed a huge but temporary drop in oil prices, reflected at the fuel docks and gas stations; and, (2) in Mexico City, federal legislators planned last summer to stimulate the country’s energy sector by increasing the national base price of all Pemex fuels by 3 percent, according to Mexican Business Net. The increase, which started on Jan. 1, 2015, hoped to offset the past five years worth of price controls that had artificially cut base prices for Pemex fuels, despite wide swings in international oil markets.

Pump vs. Base

The pump price is not the same as the base price. Boaters new to Mexico may not realize that the pump price on a marina fuel dock is always higher than the nationally regulated base price for the Pemex product. Several intermediate fuel-handling concessionaires have bought and resold the fuel before it reached the pump. Each concession tacks on its own small fee. Even marina fuel docks are allowed to charge a docking fee of 5 percent of the fuel bill.

Price influx

In March, the Mexican peso again devalued against the U.S. dollar, reaching a new  six year low, according to Bloomberg Business News. The present exchange rate of 15 to 1 gives the dollar more buying power at Mexican fuel docks than it had last year. If the peso continues to slump, boaters heading to Mexico this fall should enjoy the advantage.

Fito Espinoza, dockmaster at Marina Coral in Ensenada, commented on any effect January’s price hike has had on boaters filling up. “We have not seen a dramatic change on fuel sales,” he said, “especially from vessels that visit Ensenada for a weekend or longer.”

“An important factor to keep following,” he added, “is the peso-dollar exchange rate. The more pesos per dollar means the price per gallon goes down.”

When asked about the outlook for 2015, Espinoza said, “Until we receive the large traffic of vessels visiting us in the summer when fishing is at its peak, and again in late October when hurricane season is over, we will have vessels heading south. When this happens then we will be able to estimate if the current fuel prices have an effect on the demand.”

Border Break

However, Pemex fuel retailers in 10 zones close to the U.S. border are being allowed some discounts so they can remain competitive, according to Mike Nelson of Mexico Mike, a website that tracks such things. The border discount includes Pemex fuel docks in marinas in Northern Baja California and Sonora.

A telephone check of diesel and gas prices showed that fuel docks located closer to the U.S. are charging 45 to 50 cents less per gallon than those farther south, such as in La Paz, Baja California Sur, and in Mazatlan, Sinaloa.

“Yes, the price rose in January,” said Raisa Medruna, manager of El Cid Marina in Mazatlan. “But boaters here are buying the same amount of fuel as last year.”

Although Mazatlan boaters are not getting the border discount and have a choice of fuel docks nearby, they are “still going out and using their boats the same as last year,” Medruna said.

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