Mexico cracks down on fuel theft

15 January 2019, Week 02, Issue 746

Mexican President Andres Manuel Lopez Obrador has wasted no time in cracking down on fuel theft, which cost state-run oil company Pemex US$3 billion last year.

His drastic step of shutting down key pipelines in late December and trucking fuel across the country instead caused chaos last week. As fraught motorists waited for hours to fill up their tanks, government officials insisted there was not a supply crisis, but rather one of distribution. 

One key pipeline, running from Tuxpan to Azcapotzalco near Mexico City, was sabotaged three times last week before officials finally managed to turn the taps back on late on Janaury 11 – under monitoring from some of the 5,000 troops deployed to protect the country’s pipeline system. 

Lopez Obrador has vowed to take "not one step backwards" and said latest government data show the strategy is paying off, with only 6,700 bpd stolen last week versus 126,000 bpd in early December. Octavio Romero, Pemex’s CEO, said supply was returning to normal in key cities. 

Meanwhile, data from the energy ministry showed gasoline imports averaged 814,000 bpd in the first nine days of January, compared with 601,000 bpd in December. 

The discrepancy is because demand typically falls in December, and higher imports in January allowed Pemex to replenish stocks – that only ever average one to three days at best – which even Romero admitted had all but dried up. He told a news conference on January 14 that the government aimed to open six more pipelines – Tuxpan-Tula; Brownsville-Reynosa-Cadereyta; Madero-Victoria-Cadereyta; San Martin Texmelucan-Valle de Mexico; the jet fuel pipeline Tula-Azcapotzalco; Salamanca-Guadalajara; Tula-Salamanca – with military surveillance. 

"This will give us an additional supply, in central Mexico, of 383,000 bpd," Romero said. "If we subtract the deficit we have today, that would give us a surplus of 290,000 bpd, which would allow us to restore inventories which are practically [at] zero." 

Lopez Obrador said the system will "soon" be back to normal, though he did not specify a timeline. 

Edited by

Ryan Stevenson

Managing Editor

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