Tijuana Gas Prices $2 lower than in U.S

U.S. and Mexican entrepreneurs with an eye for a quick buck are buying subsidized fuel in bulk in Mexico and hauling it across the U.S. border to make big profits, officials say.

With a yawning gap between the cost of Mexico's state-subsidized fuel and record U.S. pump prices, tanker truck owners and people doing business on the border are filling up tanks or plastic barrels with Mexican fuel and selling it in the United States.

Gasoline in Mexico is around a third cheaper than in the United States. For diesel, prices are more than double -- well over $4 a gallon in U.S. border states compared to just over $2 in Mexican border cities.

"It is true tanker trucks are coming from the United States to fill up with supplies in Mexico," Mario Osuna, the head of Mexico's consumer watchdog agency Profeco in Baja California state where Tijuana is the capital, said on Thursday.

"There is no way of sanctioning foreigners who come to Tijuana and buy gasoline to sell in their country," Osuna told Reuters. "Mexico does not have regulations relating to that."

CIUDAD JUÁREZ, Mexico — When George Terrazas was mugged at gunpoint in this Mexican border city several months ago, he vowed never to return.

That, however, was before gasoline hit $4 a gallon in his hometown, El Paso, just across the border.
On Saturday, Mr. Terrazas was back in Ciudad Juárez, wooed by its irresistibly low-priced gasoline — around $2.66 a gallon — even if not quite unfazed by the indiscriminate gunfire from dueling drug cartels that has contributed to a 2008 average of three killings a day in the city.

“I don’t feel comfortable here,” he said, “but I can’t even fill the tank on the U.S. side.”

SAN DIEGO–The kilometre-long queue of cars heading north at the U.S.-Mexico border usually contrasts starkly with the handful of vehicles waiting to go south.

So it's with a certain irony that an increasing number of Californians have been heading south to take advantage of cheaper gas prices.

A gallon of regular unleaded gasoline in San Diego averages $4.61 (U.S.). A few kilometres south, in Tijuana, it's about $2.54 – even less if you pay in pesos.

TIJUANA – At the Pemex gas station on Boulevard Bellas Artes, just a few blocks from the Otay Mesa border crossing, a gallon of Magna gasoline costs $2.54. Or slightly less, if you pay in pesos.

 A comparable gallon of unleaded regular gasoline is selling in San Diego County at an average price of $4.61, according to the Utility Consumers' Action Network.

Lower gas prices mean American motorists could save almost $54 filling up a two-year-old Ford F150 pickup with a 26-gallon fuel tank in Mexico, or more than $38 to fill a 2006 Toyota Camry with an 18.5-gallon tank.

Gasoline prices are lower in Mexico because of a government subsidy. Pemex, Mexico's government-owned oil monopoly, supplies all gasoline throughout the country to its station franchises.

Last month, President Felipe Calderón announced a $20 billion subsidy as an emergency measure intended to keep inflationary forces in check.