How Can Mexico Stop Widespread Fuel Thefts?

Fuel thefts have proliferated throughout Mexico, and in some cases entire communities have become involved in the illicit activity. Above is a photo of a state-run Pemex fuel service station. // File Photo: Magister Mathematicae via Creative Commons.

The Mexican government on June 1 closed seven gasoline stations for allegedly selling petroleum and diesel fuel that was stolen from state-run pipelines, confirming for the first time that stolen fuel is being sold through official service stations. In early May, four soldiers and six gunmen were killed in a shootout over alleged fuel pipeline thefts in Puebla State. Have fuel thefts always been a problem, or are they on the rise in Mexico? What are the criminal and social dynamics involved? How can Mexico boost its security infrastructure for its fuel pipelines? What can the government do to otherwise stop the sale of illegally siphoned fuel?

Luis Miguel Labardini, partner at Marcos y Asociados Infraestructura y Energía: “The theft of fuel in Mexico is a problem that has been brewing for many years. It reflects the lack of rule of law, particularly in certain areas of the country, and it has resulted in an industry in which entire communities have become involved, in one way or another. Pemex has devoted most of its investment to exploration and production, and only very limited resources have been used to improve the technology dedicated to detect pilfering. The main problem is not technology, which would be readily available if Pemex wanted to improve its surveillance of pipelines, but rather a judicial system that makes it very difficult to prosecute those who make a living out of stealing fuel. This practice not only involves the communities, but also organized crime cartels, which effectively threaten local authorities and Pemex officers to stay out of the way. The new legal framework of the oil industry in Mexico has evidenced that Pemex loses around $1.2 billion per year in stolen fuel, with a significant impact on the financials of subsidiary Pemex Transformación Industrial. Pemex cannot bear this burden any longer. The federal armed forces have directly intervened in recent months, resulting in an increase in violence between law enforcement and…”

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