January, 26 2019 (Mexico News Daily)
Petroleum theft cost Pemex 147.2 billion pesos (US $7.7 billion) between 2016 and 2018, according to a report by the state oil company, a figure that is far higher than previously thought.
Pemex data and federal intelligence reports show that fuel theft and the financial damage it causes have both risen year over year in the three-year period.
In 2016, fuel thieves known as huachicoleros stole an average of 26,000 barrels of fuel a day, costing the company 30.8 billion pesos (US $1.6 billion at today’s exchange rate). The thieves sold the fuel for an average of 10 pesos a liter, generating profits of 15 billion pesos (US $790 million).
In 2017, daily fuel theft rose to 43,000 barrels, costing Pemex 50.1 billion pesos (US $2.6 billion). The price of fuel on the black market increased to 12 pesos a liter and criminal gangs’ profits doubled to an estimated 30 billion pesos (US $1.6 billion).
Last year, fuel theft spiked to an average of 58,200 barrels a day, reducing Pemex’s revenue by 66.3 billion pesos (US $3.5 billion). The price of stolen petroleum increased to 15 pesos a liter, and thieves’ earnings soared to an estimated 50.6 billion pesos (US $2.7 billion).
Last year’s losses are more than two times higher than a figure cited by former Pemex CEO Carlos Treviño, who said in April 2018 that fuel theft cost the company 30 billion pesos a year.
Experts consulted by the newspaper Milenio said that a chain of corruption had allowed the crime to grow, adding that the enduring demand for stolen fuel and the relative ease with which gasoline can be siphoned off are also factors that have driven its growth.
“The investment needed to extract fuel is less than that . . . to buy drugs,” said Gabriel Regino, a criminologist, lawyer and national security expert.
“Let me explain: in the drug trafficking production chain, there is an international situation that includes production costs in countries such as Colombia, Peru and Bolivia. In addition to processing, production and packaging, then there is the most difficult thing, transportation to the north . . .” he said.
“In contrast, in the case of fuel theft, all that’s needed is information about at what point and at what time a certain liquid, whether it’s diesel, regular or premium [fuel], is going to flow along [the pipelines] . . . a valve that doesn’t cost more than 500 pesos as well as the technical ability to attach it, a hose, containers and that’s it. The investment is minimal compared to the economic benefit obtained,” Regino added.
“It’s a business that’s characterized by its immediacy, they [the thieves] don’t have to wait until the product arrives in another country, [the fuel] is extracted from a pipeline and 10 kilometers from the pipeline it’s already on sale.”
Ernesto Villanueva, an expert on issues related to corruption, said he believed that beyond criminal gangs “there are members of governments who were participants in this crime,” claiming that “without them it couldn’t have been committed.”
Pemex officials have also been accused of involvement in fuel theft and last month the government said that three will face criminal charges.
President López Obrador said on December 27 that “there is a hypothesis that of all the [fuel] thefts, only about 20% is done by illegal pipeline taps,” charging that “the majority is done through a scheme that involves the complicity of authorities and a distribution network.”
Some members of the army have allegedly been complicit in fuel theft as well, including four high-ranking officers who are currently under investigation by federal authorities.
While fuel theft affects the whole country, there are certain states that are considered “focos rojos” or “red flags” because of the high prevalence of the crime.
Hidalgo, where more than 100 people were killed in a pipeline explosion last week, edged out Puebla last year as the state with the highest incidence of pipeline taps, recording a total of 2,121.
Guanajuato, Jalisco and Veracruz rounded out the top five. Across Mexico, there were 14,894 illegal taps detected in 2018, an average of 41 a day.
Earlier this week, López Obrador announced that more than 3.8 billion pesos (US $200 million) in social development aid would be allocated to 91 municipalities in the states considered “focos rojos” as part of a strategy to dissuade participation in fuel theft.
More widely, the government has deployed the military to safeguard Pemex refineries, storage facilities and pipelines to combat fuel theft and also shut down several major pipelines, a move that caused widespread and prolonged gasoline shortages that persist in some states.
Despite the consequences, the government has remained committed to its anti-fuel theft strategy, claiming that it is already yielding impressive results.
The Financial Intelligence Unit (UIF), a division of the Secretariat of Finance (SHCP), is also investigating gas stations that have allegedly purchased and sold stolen fuel.
The agency’s chief, Santiago Nieto, said earlier this month that “a large proportion” of gas stations located near petroleum pipelines sell stolen fuel and that the UIF had detected 10 billion pesos (US $526.5 million) in funds that are linked to the commercialization of stolen fuel and “laundered in the Mexican financial system.”