MEXICO CITY – Mexico, which has subsidized gasoline to mitigate price spikes, said on Saturday the policy would not apply in the US border region this week, citing shortages as more Americans drive south to fill their tanks .
The April 2-8 subsidy shutdown applies to cities in the border states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora and Baja California, including Tijuana, one of the world’s busiest border crossings.
Mexico’s finance ministry said in a statement that there was a gasoline shortage in the area “due to an imbalance between supply and demand”.
“In the United States, gasoline prices are higher than in Mexico, and citizens of that country cross the border to stock,” the Treasury Department said.
With fuel prices soaring after Russia invaded Ukraine, more people in the United States are driving across the border to Mexico in search of lower gas prices.
Mexico’s subsidy has been championed by the government of President Andres Manuel Lopez Obrador, which has long pledged to protect consumers from sharp price hikes at the pump.
In an interview with Reuters on Friday, Deputy Finance Minister Gabriel Yorio said Mexico planned to use the additional revenue from higher oil prices to subsidize domestic gasoline and diesel prices.