BORDER ISSUES

Protesters block trains traveling across Arizona-Mexico border after gasoline prices spike

Rafael Carranza
azcentral.com | lavozarizona.com
Around 250 Mexican protesters blocked railroad tracks that bring goods into the United States from Nogales, Sonora, on Jan 6, 2017.

NOGALES, Sonora — A spike in gas prices in Mexico prompted several hundred protesters to block railroad tracks here Friday, preventing freight trains from traveling north and south into Arizona and Sonora.

Border residents fear the jump in gas prices, the result of a law deregulating gas prices that took effect Jan. 1, will lead to a rise in other products and services. That could force border residents to cut back on spending that could also hurt businesses on the U.S. side that depend on cross-border shoppers.

Anger over the hike in gas prices boiled over this week throughout Mexico, sparking protests in cities throughout the country that led to looting in some places.

There have been at least six deaths reported as a result of the protests, according to the Associated Press.

By Friday morning, six days after the gas hike went into effect, drivers in Nogales, Sonora, said they already felt the pinch in their pocketbooks, as they’re forced to shell out almost 50 percent more for fuel.

“You have to be careful not to spend much on gas because you can really feel the difference,” said Elizabeth Ramirez, a housewife, as she pulled up to a PEMEX gas station with her two children in the car. PEMEX is Mexico's state-run oil company.

“I used to put in 50 pesos, and you knew how long it would last you. Now you add 50 pesos and it doesn’t last at all,” she said. “You barely get any gas.”

Nicolas Gonzalez, a taxi driver, said that he’s absorbing the increase, for now. But he warned that if gas prices remain the same or increase, he’ll have no choice but to increase fares.

“We know that everyone is also hurting with this,” Gonzalez said. “But we also know that there’s another increase coming in February, so I’ll have to adjust the costs a bit.”

In Nogales and along the U.S.-Mexico border, which has different pricing than the rest of the country, the price spiked to 16 pesos per liter from 11 pesos, a 47 percent increase.

That comes out to roughly $2.78 per gallon. Just across the border, in Nogales, Arizona, a gallon of fuel costs about $2.15.

‘Can’t squeeze anything more’

On Tuesday, a small group of protesters in Nogales began blocking railroad tracks near the main port of entry, preventing freight trains from traveling in either direction.

By Friday afternoon, the crowds had swelled to about 250 people, and Mexican soldiers and police officers could be seen monitoring the protest.

The group set up several makeshift tents directly over the railroad tracks. They gathered water, snacks and signs criticizing the Mexican government. The protesters said they are prepared to stay indefinitely or until the government lowers the price of gas.

"The government can’t squeeze anything more out of us," said one woman, who would identify herself only as Juan Pueblo, an equivalent of John Doe.

She was one of four original protesters who said they targeted the cross-border railroad crossing because they figured it would be the best way to draw attention.

"We don’t have enough,” she added. “They (political leaders) have high-paying jobs. We get minimum wages, and now with the gas hike the prices of everything are also going up. We can’t continue like this."

By blocking the railroad tracks, the protests affected production at a Ford Motor Co. assembly plant in Hermosillo, the state capital, said Hipolito Sedano, the Sonora border region president of the National Chamber of the Transformation Industry. The plant employs about 5,000 workers and generates another 10,000 jobs in the area, he said.

On Wednesday, protesters in Nogales also blocked the northbound vehicle lanes for several hours heading into Nogales, Ariz., at the Dennis DeConcini Port of Entry, the main border crossing in downtown Nogales.

Less U.S. spending?

The spike in gas prices in Mexico, combined with the declining value of the peso, could mean even less spending from Mexican shoppers in southern Arizona.

Each year, Mexican visitors spend an estimated $2.5 billion in Arizona. But since 2014, spending has declined, according to George Hammond, a University of Arizona economics professor who oversees the  Arizona-Mexico Economic Indicators, a website that tracks trade between Arizona and Mexico.

Hammond said the decline in cross-border spending is mainly due to the depreciation of the Mexican peso vs. the U.S. dollar. The spike in gas-pump prices will likely further reduce spending in Arizona as Mexicans are forced to tighten their belts, he said.

“An increase in gasoline prices can impact other categories of consumer spending,” Hammond said. “As gas prices rise, people tend to spend less on other things, at least in the short run.”

Even though gas is now cheaper in the U.S., that doesn’t necessarily mean Mexicans will flock to the U.S. side to fuel up.

“Remember that there are two counter forces here,” he said. “One is what’s going on with the value of the dollar versus the peso, which is discouraging Mexican visitors from crossing over.”

Although gas is cheaper in the U.S., the drop in the value of the peso means they will be getting less gas for their buck, he said.