How cheap?
A gallon of regular unleaded gasoline in San Diego retails for an average price of $4.61 a gallon. A few miles south, in Tijuana, it's about $2.54 -- even less if you pay in pesos.
But don't get too excited, my fellow USA-ers.
Gas is cheaper in Mexico because of a government subsidy intended to keep inflationary forces in check.
And guess where a majority of that money comes from? Yup. In addition to the tens of millions of dollars in foreign aid to Mexico, the U.S. of A. buys ninety percent of all crude produced by Mexico's state owned oil company, Pemex. Those crude oil purchases account for one-third of all Mexican government revenues - the source of those gasoline subsidies.And despite having the third-largest amount of conventional crude oil reserves in the Western Hemisphere, and being the fifth-largest producer of oil in the world, Mexico's crude oil output is declining. Why?
Mexico’s proven reserves have declined in recent years. According to state-owned Pemex, Mexico’s reserves/production ratio (based on previous-year production levels) fell from 20 years in 2002 to 10 years in 2006. Analysts believe that Pemex does not have sufficient funds available for exploration and investment to reverse the decline, owing to high financial burdens placed upon the company by the Mexican government.
This doesn't begin to address the horrid condition of Mexico's refinery capabilities. Ah, the joys of marxism, and state owned corporations.
Hey, pelosi and your company of do-nothing, obstructionist myrmidons! Take a lesson!!
