Last weekend the Mexican government hiked gasoline prices 20%. Today, all hell broke loose.

In response to gas hikes, looting began: 1 Dead, 600 Arrested in Mexico Gas Protests.

Anger over gasoline prices hikes fueled more protests and looting Thursday, and Mexican officials said the unrest had resulted in the death of a policeman, the ransacking of 300 stores and arrests of over 600 people.

The country's business chambers said the combination of highway, port and terminal blockades and looting this week forced many stores and businesses to close and threatened supplies of basic goods and fuel.

Mexicans were enraged by the 20 percent fuel price hike announced over the weekend as part of a government deregulation of the energy sector. Protesters began blocking highways and gas stations and some people have broken into stores to carry off merchandise.

Authorities said one policeman was run over and killed and another was seriously injured when they tried to stop robberies at a gas station in Mexico City. Police in the capital said they had arrested 76 people for looting about 29 stores.

The change boosted the average price for a liter of premium gasoline to 17.79 pesos (about 90 cents). That makes 4 liters, or about a gallon, equal to nearly as much as Mexico's just raised minimum wage for a day's work -- 80 pesos (about $4).

With blockades affecting everything from gas distribution terminals, seaports and highways to shopping centers and gas stations, the Communications and Transport Department announced it would cancel permits for any truckers who block roads.

In the Gulf coast city of Veracruz, 50 establishments including convenience stores, supermarkets and big-box outlets suffered looting, according to a preliminary count by the local chamber of commerce.

Store guards were overrun by crowds who carried off clothing, food, washing machines, televisions, DVD players and refrigerators.

President Enrique Pena Nieto said Wednesday that he would try to help groups hit hard by the increases.

Looting, Protest Images

The above images courtesy of CNN: Mexico: 20% gas price hike fuels looting, protests.

Presidential Statement

President Pena Nieto: "I understand the anger and irritation felt by the general public over the price increases. But if this decision had not been taken, the effects and consequences would have been far more painful."

Mish Translation: "Mexico is broke. Our beloved peso collapsed along with oil revenue. As a consequence of declining revenues and increased spending, inflation is rampant. We had to hike prices and we may have to increase interest rates even more. My statement that we will help those hardest hit is of course a lie."

Earlier today I reported Mexico Central Bank Intervenes to Prop Up Peso.

Mexico Needs New Plan

Mexico might wish to try honest money and a balanced budget.

Here is a proposal by my friend Hugo Salinas Price that makes sense: Hugo Salinas Price Asks Mexico for Silver Coin to Calm the National Tantrum.

Mexico did not heed the advice. And we have have seen the results.

Mexican oil won't last forever. It's time for a new plan.