Gas prices fueling fill-ups in Mexico

TIJUANA, Mexico — U.S. motorists are flocking to gas pumps south of the border to save 25 percent or more on the cost of a fill-up — courtesy of the Mexican government.

Worried about inflation, Mexican officials are keeping a lid on retail prices at the state-owned petroleum company Pemex. A gallon of regular in this border town is selling for about $2.60. With prices in California averaging $3.43 — and topping $4 at some stations — drivers are grabbing a deal while they can.

Mexican station owners, too, are pumped by the surge in business. Although they say few Americans are traveling to Mexico specifically to fill their tanks, many more than usual are taking advantage of the chance to buy cheaper gas when they cross the border.

Pemex's pump sales are up 10.5 percent through the first four months of the year compared with the same period last year. Vendors are girding for a rush of business Memorial Day weekend as Americans head to Mexican vacation homes and take home a cheap souvenir in their tanks.

"This has been very, very favorable for us," said Jorge Farfan Gonzalez, general manager of a franchisee that operates 17 Pemex outlets in Baja.

But some say that low-cost gas might not be such a bargain.

Mexican stations are notorious for dispensing short liters. And their fuel, loaded with sulfur, isn't as clean as that mandated in California. That's tough on the environment, and it could harm catalytic converters on newer U.S. cars and trucks, too, said Rich Kassel, a clean-fuel expert with the Natural Resources Defense Council in New York.

"This is the extreme version of driving across town to save a nickel," Kassel said. "It doesn't make sense if you ... end up with fuel that is dirtier and can damage your engine."

There are other risks. Many Pemex attendants are unpaid freelancers hustling for tips — and the chance to shortchange distracted drivers. Some franchisees also have been known to dilute fuel to stretch profits.

The government regulates every aspect of Mexico's gas industry, including retail prices.

As U.S. gas prices have soared, Mexico's border prices for regular have remained at 7.41 pesos a liter, or about $2.60 a gallon. Prices in the interior are even lower at about $2.41 a gallon.