In his address to the nation on the occasion of the beginning of 2017, President Enrique Peña Nieto said that this will be a year of major challenges for Mexico, the government and society.
He explained the reasons behind the gas price increase:
1. In the past year, worldwide oil prices rose by approximately 60%.
2. This, in turn, has raised international gas prices, which directly affects Mexico; because for years, over half the fuels consumed in the country were imported.
3. The gas price increase is due to external factors.
Negative effects avoided:
- Heads of household would lose their jobs.
- Young people who are graduating today, would not find a job.
- Couples who have just taken out a home loan would find it more difficult to pay off their mortgage.
- And housewives would find that they could no longer afford to go shopping, as prices would rise.
- Families, especially those with lower incomes, would be severely affected.
How are families’ economies protected?
Attempting to maintain the artificial price of gasoline would have forced the government to reduce social programs, raise taxes or increase the country's debt, jeopardizing the stability of the entire economy.
Maintaining artificial gas prices in 2017, at the December rate, would have involved an additional expenditure of over 200 billion pesos.
This amount is equivalent to:
- Paralyzing all Social Security services for four months, from consultations with the GP, to surgeries, daycare centers and emergency services.
- Suspending the assistance provided by the PROSPERA program to nearly 7 million families for two whole years.
- Suspending the Popular Insurance Scheme, which protects the health of over 50 million Mexicans, for three years.
- Government spending has been cut by nearly $190 billion pesos.
- About 20,000 jobs have been eliminated, equivalent to a reduction in salaries and benefits of more than $7.7 billion pesos.
- As of the first quarter of this year, there will be a 10% reduction in federal agency directors’ salaries.
"I know that bringing gas prices into line with international rates is a difficult change. But it is my responsibility as president to make difficult decisions in the present to avoid further damage in the future”. EPN