MEXICO CITY: Mexico’s government, business leaders and agricultural groups agreed on Monday to prevent increases in the cost of basic goods after a gasoline price hike sparked daily and sometimes violent protests.
As thousands marched again in Mexico City, President Enrique Pena Nieto did not signal any backpedaling on the government’s unpopular decision to increase gasoline prices by up to 20.1 percent.
But he was joined by business leaders at his official residence in Mexico City to announce an agreement to keep the prices of other goods under control.
“The business sector is making the commitment to help in order to not resort in an indiscriminate increase in prices,” Pena Nieto said.
“This is possible because gasoline, for the majority of products, represents just a fraction of production costs,” he said.
The agreement published by the administration warns the government will “watch for and sanction any abuse.”
The government, meanwhile, will apply austerity measures including a cut in the salaries of senior officials by 10 percent in addition to a previously announced 1.7 percent budget reduction.
While the Business Coordination Council backed the deal, the powerful COPARMEX trade confederation refused to join.
“It is more important for such an agreement to be the fruit of a real and broad social consensus, and not just serve as a communications or public relations strategy,” COPARMEX said in a statement.
Mexicans have held daily protests since the government increased the cost of a liter of gasoline on January 1 as part of a deregulation of fuel prices.
Some protesters clashed with police while others looted stores, leaving at least three people dead and some 1,500 arrested.
More protests took place on Monday, including thousands in the capital where people shouted “Pena Out!”
Pena Nieto has defended the price increase, saying it was necessary to avoid cuts in health care and welfare programs after global oil prices went up. Mexico imports more than half of the gasoline it consumes.’