On Monday I ran a column called “Brooding Rebellion” in which I talk about the first outbursts of protest against the imposition of nearly 20 percent increases on the price of gasoline, diesel and electricity.
I’m sorry to inform you that my call was correct in saying that the unhappiness over the hike would only grow as the week went by and indeed it did, exponentially.
What started as small groups of people blocking the Mexico-Querétaro expressway for three hours last Sunday was the spark that lit the nationwide repercussion, and a map of cities with protests went from Tijuana to the Yucatan peninsula. Dozens of different stores have been looted by mobs who claim their thieving act is an angry response to Enrique Peña Nieto’s fuel hikes.
President Peña Nieto stayed mum for a couple of days, but as the road blockades and looting grew and raged he could no longer play ostrich, and on Wednesday at noon he finally came up with some comments on the hikes after he announced the replacement of the head of the Foreign Relations Secretariat (SRE).
The president delivered a subdued speech claiming he understood the “anger” of the people at having to pay higher prices for a product that Mexicans have been educated to believe is their heritage, not a simple commodity.
Unfortunately for Peña Nieto, his credibility has been greatly undermined by his own words. In his brief explanation of the reasons for the fuel price hikes he denied that it was the results of his Energy or Fiscal (Tax) reforms. But he pushed them through promising “lower gasoline and electricity prices.”
“The adjustment in the price of gasoline reflects the increase in international prices of gasoline. The increase is a responsible measure and consistent with what I have decided is a priority of our administration,” He said and added:
“The priority for my government is to preserve the economy of our nation. If it wasn’t done this way, the cost of not watching for our economic stability would be greater, costlier than the measure that has been undertaken. It was a difficult and painful decision but inevitable; not doing it would be graver and more delicate to handle.”
On the streets, his words were considered as another batch of hogwash from a president that over the past few years has repeated to the hilt that the prices of gasoline and electricity would be lower by the end of his mandate.
At first people believed in him, but that is no longer the case. His call for “calm and understanding” was answered with more looting and road blockade demonstrations, which if taken by numbers of people protesting would not be of deep concern; it is the wide spread anger that is really worrying and indeed has the president pushed against the wall, because each angry protester wielding a cardboard hand-painted sign calls him a “liar” and calls for his resignation.
The cherry on top in Peña Nieto’s speech to the nation, which went almost unnoticed as it was not on nationwide mainstream television channels, was a call “for us all to pay for the cost of this increase to continue moving forward.”
Adding insult to injury, the president said that the government “would not permit price increases of other products,” but at the pump it is evident to people that at gas stations a majority of the operators have rigged the pumps to sell 900-milliliter liters, a practice filling station operators are expert at. Basic products have gone up in price this very week, and surely the 3 percent inflation forecast made by Mexico’s Central Bank (Banxico) will be shattered to pieces. Expect it to grow.
Most critics are bashing the increase, because in the end it is not a natural cost but a brutal tax hike, as the government is collecting 43 centavos for each peso the filling station sells.
An observation by a pundit is that in this hike the government gives nothing back to the people except outright exploitation through heavy taxation.
This is an issue that will not go away, but in the end President Peña Nieto has been shoveling the dirt out of his own political grave by delivering every time exactly the contrary of what he promised.
Some prophets of doom are even saying that he has woken up that sleeping beast known as “Bronco Mexico” that had been interred with the Mexican Revolution. Let’s hope they are wrong.
But the president has to do something, and pronto, and a good move would be to cut the latest gas hike in half to 10 percent.
Maybe that may appease the angry crowds, before they turn into violent mobs.