The prices increases, between 14% and 20% for gasoline and diesel, have animated public anger in Mexico in a way that previous unpopular policies haven’t, and as those hikes begin to push other prices up, that frustration looks set to endure.
Tortillas – flour or corn disks cooked and adorned in myriad ways by millions of Mexicans every single day – are likely to become the next flash point.
Mexico City-based daily Reforma reported that a number of food products had gone up in price during the first two weeks of January, with tortilla prices going up by as much as 18%.
During the second week of January, Hermengildo Jimenez, a tortilla maker at a small shop in a working-class area of Mexico City, told the Financial Times during the second week of January that a painful 17% price increase in the price of a kilo, about 2.2 pounds, of tortillas could be coming in the next few days.
That increase would take prices at Hermengildo’s shop from 12 pesos to 14 pesos, or about $0.64 – a not insignificant increase, given that the minimum daily wage in Mexico has only recently risen to 80 pesos.
“It’ll have to go up. The petrol price rise affects us too,” Hermengildo’s brother, Jose Antonio, told the FT. “The mill that grinds the corn uses gas as well.”
- REUTERS/Tomas Bravo
By the end of that week, according to Mexican daily La Jornada, the average price for a kilo of tortillas at traditional outlets had exceeded 13 pesos, marking a 2.3% increase over the first 13 days of the month and a 5% jump over January 2016.
In seven of every 10 cities, tortillas were selling for above the average of 13.12 pesos, La Jornada reported, with peaks of 17 pesos in northern border cities Mexicali and Nogales and the southwest coastal city of Acapulco, among other places.
A tour of stores done by El Financiero found that prices for a number of staple food goods had gone up.
Jalapeño chilies in some places had gone up 100%, from 6 pesos a kilo in June 2016 to 12 pesos this month. Beans have gone from 13 pesos a kilo to 16 pesos a kilo during January, while white rice has risen more than 10% so far this year, from 6 pesos a kilo at the start of this month to 7 pesos a kilo during the second week of the month.
Some goods – like avocados, sugar, or tomatoes – have seen their prices fall in some places, however.
- REUTERS/Tomas Bravo
The combination of a move to a market-pricing scheme and a long-delayed price increase have contributed to the drastic nature of this month’s price increase, which comes at a time when inflation – spurred on by the peso’s slide against the dollar – hit a two-year high of 3.36% this month and is expected to climb higher this year.
Mexican President Enrique Peña Nieto has said the fuel price increases must go forward, and even though the benefits of the fuel subsidies that are being ended mostly accrued to the wealthiest households, the knock-on effects of those hikes have hit many Mexicans in their wallets, spurring the protests that have continued throughout the month.
“I don’t have a car, but I use public transport. When gasoline goes up, food goes up, everything goes up,” 40-year-old Armando Galicia, who works at a convenience store in Mexico City, told The Wall Street Journal at the end of last year.
“It’s an economic issue,” Manuel Lopez, a mechanic who had to sell his car amid Mexico’s economic doldrums, told The Guardian at the start of January.
- REUTERS/Edgard Garrido
“Salaries are not very good. If gasoline goes up, it provokes an inflation in the cost of the items we consume daily,” Lopez said. “The first thing that gets hit are people’s pocketbooks.”
“It’s not because we all have cars. When gasoline prices go up, everything else goes up: tortillas, public transportation, everything,” Hector Pérez, a sales manager at an insurance company, told The Guardian a few days later.
In an effort to ease public outrage, Peña Nieto announced a pact with business groups and unions to avoid disproportionate prices increases as a result of the fuel price hike, but the proposal was so slight on detail that a major business lobby refused to sign. Some observers said the deal amounted to little more than political posturing.
- Thomson Reuters
With elevated fuel prices projected to continue into the summer, along with resultant rises in the prices of food and public transportation, anger with Peña Nieto’s government – over not only fuel price hikes but also the declining purchasing power of the peso and a spike in violence that seems to be sweeping the nation – seems likely to last through gubernatorial elections this summer and potentially through the presidential election in mid-2018.
At stake this summer is the governorship of Mexico state, which Peña Nieto’s party has held for 80 years, and the presidential candidacy of Andres Lopez Manuel Obrador, a leftist populist who has seized on the current government’s myriad shortcomings, has been riding high in recent weeks.
“People are very upset,” Rodolfo Soriano-Nuñez, a sociologist and political commentator, told The National Catholic Review. “I haven’t seen such an outburst of nationwide anger in many years.”