New Year Price Hikes

(Acapulco, NA 5 January) Early January is a time when the state-owned companies like to raise their prices. Most consumers have their year-end bonuses, and are less likely to notice and complain. Gas goes up a little bit each month. Now, the price of regular is $8.84 pesos a liter (about US$2.79), up 9.2% over the last twelve months. LP Gas has also risen by anywhere from 6-10%. Electric rates are on an upward march; in addition, the January bill always is almost double the usual amount because there is an added surcharge to help pay the year-end bonuses for the CFE employees. The very expensive toll road between Mexico and Acapulco will also take a bigger bite. It now costs well over US$50 to make the full run, and the toll booths are set to jack up the rates by 3.37%.

Vices, too, take their toll: Cigarettes have gone up from $30 pesos a pack to $38 pesos (about US$3.16). Alcohol in general is now more expensive, up anywhere from 3-10%.

Basic staples, like eggs, chicken, beef, beans, rice and tortillas are also tending to rise. In 2010, a kilo of tortillas cost $10 pesos. Now the price is $12 in most places.

The minimum wage in Mexico rose 4.1% on January 1 to US$4.99 per ten-hour work day, up from $4.79 per day. Different from the situation in the US, in Mexico a large portion of the workforce actually has to live on the minimum wage. This year the price increases more than wiped out the $0.22 per day wage increase, so that the very poor are now worse off in 2011 than they were in 2010.