Mexico’s fuel market liberalization has done something rarely seen before: make California’s pump prices look cheap.
Drivers are flooding across the border to southern California to fill up on gasoline, after protesters blocking distribution centers near the Baja California capital of Mexicali caused stations to run dry. Antunez’s Shell gas station in Calexico is just five blocks away from the Mexican border and rarely has business been as busy as now. Mexicali drivers wait four to five hours to cross into the U.S. just to fill their fuel tanks and then wait two more hours to cross back into Mexico.
The underlying cause for this curious situation is that for the first time in 80 years, the country has de-monopolized its fuel industry, opening it to foreign competitors - but they also significantly increased fuel prices:
The 20 percent hike, dubbed a “gasolinazo,” or fuel-price slam, sparked protests across the country that curtailed fuel distribution, leaving Petroleos Mexicanos, or Pemex, struggling to keep its stations supplied.
Thus, the rush to the border. The value of the peso's in decline as it is, which isn't likely helped by the fact that auto makers have announced that they're heading back to the USA. Now, with gas prices bumped up, the unthinkable has happened: it's cheaper to refuel in California than in Mexico. The problem is that throughout the state, gas prices are notoriously fickle, and this development could lead to further destabilization.