Mexico worries that oil price cut could ignite social unrest

Drop the price of oil $1 a barrel and the United States consumer immediately benefits at the gas pump - but for oil-producing Mexico, that drop is catastrophic.

It translates into a loss of more than $500 million a year for the Mexican treasury.

For a nation that almost went belly up economically in 1982 due to its whopping foreign debt and a sluggish demand for its oil, a new drop in oil prices would aggravate almost every aspect of its economic and social order.

Already, unemployment has grown, business bankruptcies are soaring, the purchasing power of salaries is declining. And social unrest has become a distinct possibility.

This scenario is sending shivers through the US banking community, which has has begun to worry about the stability of its close southern neighbor with whom the US shares a largely undefended, 2,000-mile frontier.

An unstable Mexico could have serious consequences for the US. With Mexico having displaced Saudi Arabia in 1982 as the largest supplier of oil to the US, Washington wants no disruption in this flow.

Even more worrisome at the moment is the flow of illegal immigrants from Mexico. Some border observers estimate that at least 1 million Mexicans illegally crossed into the US in the final three months of 1982. The tide could increase if economic conditions in Mexico worsen.

Equally troublesome for the US was a 34 percent drop in exports to Mexico during 1982 and the likelihood that the trend will continue. During 1982, that export decline resulted in a layoff of 150,000 US workers, according to the US Department of Commerce.

Even more disturbing in the long run is the possibility that Mexican workers could erupt in anger over deep cuts in their take-home pay and purchasing power.

Manuel Buendia, a columnist for the Mexico City morning daily Excelsior, warned that such a scenario could be in the offing.

''The possibility grows by the hour . . . (that) workers' anger would spill over into the streets,'' he wrote recently. ''It would link up with the anger of the bureaucrats and would have an immediate incendiary effect on certain sectors of the middle class. Then we would have something much worse than the hot and bloody summer of 1968,'' when university and preparatory students demonstrated over school conditions.

The new government of Miguel de la Madrid Hurtado is clearly concerned about this prospect. ''It gives the president fits,'' says a close adviser. ''But he thinks he can weather the possibility as he grapples with debt rescheduling.''

That rescheduling of repayments on foreign loans is moving ahead. In the meantime, Mexico is pumping more oil than ever before. In December 1982, it produced a record 3,023,000 barrels per day, up 10 percent from the previous production limit of 2,750,000 barrels.

Looking ahead, Mexico could increase production still more and offset price drops with production boosts. Income would then be about the same as before the price slump. But with forecasts for oil prices to drop significantly from the present $32 a barrel, Mexico would need a crash production program just to stay even.