With gas prices climbing, Texans fuel up at Pemex

Over the past year Pemex gas station attendant Juan Alvarado has seen a jump in the number of motorists with United States license plates crossing the border the fuel up.

As of last year, he estimates that about 30 percent of his clients at the station, located on Calle Sexta in Matamoros, were from the United States. Today, he says that figure sits somewhere between 60 and 70 percent.

Ordinarily, the price differential might not be worth crossing the border for, since a roundtrip ticket to cross the B & M International Bridge costs $4.00.

But with gas in Mexico at $2.70 per gallon - compared to $3.49 in the Brownsville on Thursday - even after the expense of crossing the bridge, a driver with a 30-gallon tank can still save $20.

"I live in Brownsville, but I'll make a trip over here even if I only need gas," said Hector Cervantes, a Brownsville carpenter said Thursday as he waited for his tank to fill at the station. "I used to get gas over there, but for the past six months I've been coming here."

University of Texas Brownsville and Texas Southmost College student Javier Castañeda also stopped by to fuel up on Thursday afternoon.

"I'm from Brownsville but I get my gas over here and live over here because it's cheaper," Castañeda said. A business major, Castañeda said the economics of living on the Mexican side of the border are enough to make the commute worthwhile. "The only thing is, I always get to class late."

Sen. John Cornyn discussed the gas crisis Thursday in a conference call with reporters. He planned to introduce new legislation that would allow states to explore for oil within the United States.

"Congress needs to get out of the way and deal with one of the most pressing concerns on the family budget in both Texas and America, which are rapidly rising gasoline prices," he said. "Seventy percent of the cost of gasoline is related to the cost of oil. We also could do more to expand refinery capacity, because there hasn't been a new refinery built in the United States in the last 30 years, which is primarily due to (regulations from) the federal government."

As the world's leading shallow water oil producer, Mexico's nationalized oil company, Pemex, has long enjoyed revenue from crude exports.

According to Jed Bailey, the managing director for emerging markets at Cambridge Energy Research Associates, the static prices of Mexican gas are dependent on a federal tax that is used to protect the country from fluctuations in global oil prices.

"When oil prices are low, the tax gets bigger; When oil prices get higher, the tax shrinks," Bailey said. "Part of the logic is that because the government gets so much revenue from crude sales, when oil prices are low, revenue from crude exports is also low, so the higher tax on gasoline offsets that. When oil prices are high, Pemex makes more money from their crude exports, and that money is used to help offset a lower tax on the gasoline sales within Mexico."

But, Bailey says, even Mexico isn't isolated from a shrinking supply of oil. The country's greatest source of oil is from a single field, Cantarell, whose supply is diminishing.

"A lot of the prospective areas to look for new oil are in the underwater offshore areas, and because of Mexico's constitution, all exploration rights are reserved for Pemex," Bailey said. Currently, the debate to change the constitution to allow for international technical expertise in exploration is underway.

"This issue is at the heart of the energy sector reform debate in the Mexican Congress right now," Bailey said. "This is the first step toward getting more people involved in getting more oil out of Mexico."