Gasolinazo: Mexican Energy Minister Has Stake in Gas Stations

An anti-corruption group in Mexico revealed Tuesday that the energy minister, as well as relatives of President Enrique Peña Nieto, had financial interests in the recent gas hikes that have sparked protests across the country for the second week in a row.

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Energy Minister Pedro Joaquin Coldwell is a shareholder of four of the five gas stations on the Caribbean island of Cozumel in partnership with his sister and two sons.

One of the gas stations was closed down in April 2016 over alleged manipulations of prices, as the station was not providing the amount of diesel customers were paying for, Mexicans Against Corruption and Impunity exposed in the official reports by Profeco, the oil watchdog in Mexico. The ruling was appealed.

The investigative paper Aristegui Noticias denounced a conflict of interests even more problematic in the context of the contested gas price hike. “Coldwell is the head of the energy sector in Mexico. As the energy minister, he could access privileged information on the oil business,” said the article.

Coldwell denied any interference in the administration of the four gas stations in an interview with the anti-corruption group, adding he will pass over his shares to a trustee in order to avoid conflicts of interests.

Besides Coldwell, an uncle and a cousin of Peña Nieto are also shareholders of oil companies, namely Inmobiliaria Hemajo y Servicios Ata SA de CV, said Aristegui Noticias, also sanctioned by Profeco for selling “uncomplete liters of oil.”

Mexicans have been protesting the gasolinazo — a gas price hike of nearly 20 percent — since Jan. 1, part of Peña Nieto’s attempts to deregulate the energy sector. Protests have included blockades of streets and gas stations, and even looting, across several states as thousands of people march across the country. By Saturday, at least 25 states were under popular mobilization.

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As predicted by a professor and researcher at Mexico’s Chapingo Autonomous University, the price increases have hit campesinos and large-scale farmers the hardest. This has jeopardized agricultural production and food security.

Thus far, the result has been the death of at least six people, including one police officer, the destruction of hundreds of stores and businesses, and the arrests of over 1,500 people. Still, Peña Nieto has vowed to keep the measures, saying the increase in prices are due to external factors and not to his euphemistically-dubbed “Energy Reform,” nor to “an increase in taxes.”

However, despite the international prices Peña Nieto referred to, 40 countries around the world have not increased gas prices while seven nations have lowered them, according to a report by Global Petrol Prices.

The reforms are moreover affecting the most vulnerable sectors of society, with consumer prices expected to continue rising. Consumer prices already rose 3.36 percent from December 2015, national statistics agency INEGI said last week, the highest rate since December 2014 and above the central bank's 3 percent target.

The figure was below the 3.4 percent analysts forecast in a Reuters poll in November.