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Pemex pipeline explosion Nopala, Hidalgo An explosion in Nopala, Hidalgo, in January caused by fuel theft from a Pemex pipeline.

Fuel theft on the rise again but the loss to Pemex is still a fraction of what it was

Crackdowns have saved the company US $10.4 billion, but illegal taps are up 14.6%

The federal government has drastically reduced fuel theft since it took office in late 2018, but the crime still cost the state oil company Pemex a significant amount of money over the past three years and is now on the rise again.

Information obtained by the newspaper Milenio via freedom of information requests showed that fuel theft cost Pemex 2.46 billion pesos (US $123.6 million) between 2019 and 2021. The figure represents a loss of just under 2.25 million pesos (almost US $112,000) per day in the three-year period.

While the loss over the past three years is substantial, it is in fact a 98% decrease compared to that incurred by Pemex in the final three years of the government led by former president Enrique Peña Nieto. Pemex said in a 2019 report that fuel theft cost the company 147.2 billion pesos (US $7.4 billion at today’s exchange rate) between 2016 and 2018.

The huge decrease in losses emphasizes the vast size of the fuel theft problem inherited by the current government. While AMLO’s administration has succeeded in reducing its incidence compared to the final years of the Peña Nieto government, data shows that illegal taps on state-owned pipelines increased by 14.6% in the first quarter of this year compared to the same period in 2021.

former president Enrique Peña Nieto
Fuel theft cost Pemex 98% less in losses during AMLO’s administration than in the final three years of former President Enrique Peña Nieto’s. Government of Mexico

Authorities detected 3,199 taps between January and March, an increase of 409 compared to the first quarter of 2021.

Just over 45% of the total – 1,454 – were detected in Hidalgo, where an explosion on a tapped pipeline killed almost 140 people in 2019. Pipeline taps in the state increased 17% annually in the first quarter.

México state and Puebla ranked second and third, respectively, for pipeline taps in the first three months of the year with 477 in the former state and 267 in the latter.

Cuatepec de Hinojosa, a Hidalgo municipality on that state’s border with Puebla, is currently Mexico’s fuel theft capital with more taps detected there than in any other municipality.

Despite the recent increase in taps, Security Minister Rosa Icela Rodríguez said Monday that the government is achieving “encouraging results” in its ongoing fight against fuel theft.

Speaking at President López Obrador’s morning press conference, she highlighted that 72,000 barrels of fuel were stolen every day when the government took office, while the figure for April was 6,700 barrels per day (bpd), a reduction of over 90%. The savings generated by the government’s military-led crackdown on fuel theft between December 2018 and April 2022 are estimated to be just over 206 billion pesos (US $10.4 billion), Rodríguez said.

She presented additional data that showed that the volume of fuel stolen has recently increased. The figure rose to 5,800 bpd in March from 4,500 bpd in February before jumping 15.5% in the space of a month to 6,700 bpd in April.

The International Crisis Group, an NGO, warned earlier this year that Russia’s invasion of Ukraine could make fuel theft more lucrative and prevalent in Mexico, but it was unclear whether the recent spike was related to that conflict.

Mexican soldier guarding gas pipelines in Hidalgo
A soldier in Hidalgo, part of a deployment of soldiers guarding 327 kilometers of pipelines across the state.

National Defense Minister Luis Cresencio Sandoval told López Obrador’s Monday press conference that the military is carrying out operations in rural and urban areas to detect illegal taps on pipelines.

“The deployment has been strengthened with a greater number of elements,” he said, adding that military aircraft support the efforts.

Sandoval also said that the military and the National Guard conduct operations to seize stolen fuel. Security forces check the documentation of tanker trucks traveling on the nation’s highways and carry out “administrative visits” to gas stations, he said.

The army chief explained that soldiers monitor the flow of fuel through the nation’s pipelines from Pemex headquarters in Mexico City to detect illegal taps and highlighted that the military has a coordinating center in Hidalgo.

The overarching aim, he said, is to strengthen the anti-fuel theft strategy in order to reduce the incidence of a crime that has once again begun to grow.

Almost 850 pipeline taps were detected and repaired over the past month while 761,000 liters of stolen fuel were recovered, data shows. In the same period, authorities seized 135 vehicles and six properties used by fuel thieves and detained 31 people.

With reports from Milenio

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