Plug-in allows stations to fudge their sales volumes.
Scores of gas stations in Mexico allegedly use an illegal software plug-in that allows them to manipulate the sales figures they report to Pemex and tax authorities, and conceal the sale of stolen fuel.
As many as one-third of Mexico’s 12,000 gas stations use a software program called ControlGas, which was created by the company Atio Group in 1997.
Installed on a gas stations’ pumps, the software precisely records the amount of fuel that is purchased and sold, and sends the data to the state oil company and the Federal Tax Administration (SAT) on a daily basis as required by law.
But according to two former unnamed company employees, Atio Group – which is owned by Pablo César Gualdi, a former president of the Mexican Association of Service Station Suppliers (Ampes) – doesn’t just sell ControlGas but also an illegal plug-in known as El Rastrillo (The Razor).
The plug-in allows the pumps’ volume controls to be altered, with gas station owners choosing between options that enable them to report sales that are 5%, 10% or 15% below their real level.
“Basically, it’s a program that’s added to ControlGas to shave off liters and fudge the numbers that are reported to the government,” one employee told the newspaper Milenio.
“This parallel software allows the reports that are sent to Pemex, of purchases, sales and stock, to be altered . . . if you shave off or cut off liters, you can sell stolen fuel,” said the other employee, who was fired for refusing to sell the illegal plug-in.
“I was able to see how the system was used in several gas stations,” he added.
Both former employees have received death threats, Milenio reported. Atio Group management didn’t respond to requests for an interview, the newspaper said.
The illicit scheme hasn’t gone unnoticed by the federal government, which is currently cracking down on fuel theft by deploying the military to protect Pemex infrastructure and closing several major petroleum pipelines.
Santiago Nieto, chief of the Finance Secretariat’s Financial Intelligence Unit (UIF), said recently that 194 gas stations are under investigation for altering their pumps’ volume controls and reporting income and expenditure that don’t add up.
On January 14 he said that many gas stations located near petroleum pipelines sell stolen fuel, explaining 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.”
A drone captured images of 148 trucks lining up to enter illegal fuel supply depot in Puebla in 2017.
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.
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.”
Teachers protesting in Michoacán want 5 billion pesos (US $263 million) before they will end their rail blockade and return to the classroom.
At a meeting with state and federal education authorities, leaders of Section 18 of the CNTE teachers’ union said the 1-billion-peso (US $52.6-million) offer made by the federal government was not enough.
That amount, they said, would only cover one month of wages that teachers are owed.
The union leaders argued that the additional 4 billion pesos is needed to pay benefits and bonuses to teachers, stipends to teaching students and retirement bonuses, all of which they say were agreed to with previous federal governments.
“The work stoppage will be maintained . . . We call for [the government’s offer] to be strengthened . . .” the leaders said.
However, neither the federal government nor the Michoacán government appears to have enough funds available in their budgets to give the union the money it is asking for.
Héctor García, head of the administration and finance division of the Secretariat of Public Education (SEP), said the federal government’s offer could only go up to 1.2 billion pesos.
He called on teachers to remove their railroad blockades, pointing out that uninvolved third parties including the manufacturing sector and students are suffering as a result.
Supplies destined for factories in Michoacán and other parts of the country have been stranded in the ports of Lázaro Cárdenas and Manzanillo, while auto makers and other manufacturers have been prevented from getting their products to the ports for export.
Trains transporting gasoline have also been unable to supply parts of the country, such as Jalisco, which are still experiencing fuel shortages.
Michoacán Governor Silvano Aureoles yesterday called on the federal Secretary of the Interior to clear the tracks.
In a statement, the governor said that “under the rule of law, the illegal blockade of transport routes cannot be allowed,” adding that the state’s railroads are not only crucial to the economy of Michoacán but to that of the whole country.
Aureoles said that state authorities are willing to cooperate with the federal government on the operational actions it deems necessary to clear the tracks.
Despite the “grave damage” caused by the blockades, “there will be no repression, [the federal government] will not resort to using public force,” she said.
“We are going to negotiate, and when negotiations are over, we will negotiate some more.”
As several states continue to deal with fuel shortages a key source of gasoline has gone offline due to technical problems and the shortage of a fuel additive.
Production at the Antonio M. Amor refinery in Salamanca, Guanajuato, stopped Wednesday due to problems with the facility’s reformer units and a shortfall of the chemical additive MTBE.
According to sources inside the refinery, most of the site’s reformers are merely recirculating their supply while others are undergoing extensive repairs. Sources also say that lighting has been shut off in some parts of the complex.
The Salamanca refinery produces about 23,600 barrels of gasoline a day, 13% of Mexico’s total production.
Fuel from the refinery supplies the states of Guadalajara, Guanajuato, Durango, Nayarit, Jalisco, Colima and Michoacán, among others.
Sources told reporters that Pemex hopes to resume regular fuel production by February 9.
At least 30,000 workers at 41 factories in Matamoros, Tamaulipas, went on strike at 2:00pm yesterday after failing to reach an agreement for higher pay, triggering dire warnings from business leaders that the economic losses could be considerable.
The members of the Union of Laborers and Industrial Workers of the Maquiladora Industry (SJOIIM), are demanding a 20% salary increase and an annual bonus of 32,000 pesos (US $1,700).
In a letter sent to the companies that operate the maquiladoras, or factories, the union said the demand for a raise is independent of any salary increases as a result of the doubling of the daily minimum wage in the northern border area to 176 pesos (US $9.25).
At least 45 maquiladoras in Matamoros, most of which are in the automotive and electrical sectors, have been partially closed since January 12 as the SJOIIM negotiated with companies for increased pay.
The union reached agreements on behalf of around 2,000 workers at four factories – Polytech, AFX, CTS and Core – but the demands of around 30,000 more have not been met, precipitating yesterday’s walkout.
As a result of the labor uncertainty, one company, Cepillos de Matamoros, has announced that it is closing its factory and leaving the city, while another, engineering company Parker, appears to be doing the same although it has made no formal announcement.
At least two other companies have also signaled their intention to leave the northern border city and another has suspended work on the expansion of its plant.
Thousands of jobs are expected to be lost as a result of the closures.
The federal government tried to stop yesterday’s strike by proposing that negotiations between the union and companies be extended by 10 days.
But according to Juan Villafuerte, general secretary of the SJOIIM, the proposal made by Labor Secretariat undersecretary Alfredo Domínguez came too late.
Villafuerte said he expected at least three companies to leave Matamoros.
Domínguez told a press conference yesterday that the strike would not just have an impact locally but also at a national and even international level.
He said the union and affected companies would now have to negotiate at the Conciliation and Arbitration Board in the Tamaulipas state capital, Ciudad Victoria.
Abel Morón, president of the Matamoros chapter of the Mexican Chamber of Commerce (Canaco), estimates that monthly economic losses associated with the strike action could exceed 120 million pesos (US $6.3 million).
As many as 20,000 jobs could be lost and the labor market and local economy could take up to a decade to recover, he said.
Luis Aguirre Lang, president of the National Council of the Maquiladora Industry (Index Nacional), said the pay increases sought by the factory workers are beyond the means of the affected companies if they wish to remain competitive.
Speaking at an event in Ciudad Juárez, Chihuahua, Aguirre called for President López Obrador to mediate the dispute, explaining that Index Nacional has already requested a meeting with the president so that he sees “the transparent spirit with which our industry meets [the needs] of Mexican workers.”
In a Twitter post yesterday, federal Labor Secretary Luisa Alcalde said the government was involved in the negotiations even though she considered the dispute a state matter.
“With respect to the labor conflict in Matamoros, despite it being a state issue, the Secretariat of Labor and Social Welfare is contributing so that an agreement is reached. We’ve called on the parties to continue with dialogue for the good of the workers and the sources of employment,” she wrote.
A national business leader warned in a Twitter post that dozens of businesses, thousands of workers and Mexico’s reputation are at risk.
“It’s been a long time since Mexico experienced a crisis of this magnitude,” wrote Gustavo de Hoyos Walther, president of the Mexican Employers Federation, Coparmex.
The National Security, Energy, and Environmental Agency (ASEA) has fined a company responsible for clearing land for the new Pemex refinery in Paraíso, Tabasco, for environmental damage.
In addition to the 13-million-peso fine (US $685,000), the ASEA ordered the reforestation of 82.8 hectares of land and a wildlife preservation program with a minimum investment consistent with the damages caused by the firm.
The Paraíso refinery was a major project for President López Obrador during his election campaign. He announced the 155-billion-peso plant on December 9.
The Mexican Environmental Law Center (CEMDA) filed an official complaint with the ASEA implicating Pemex and the private contractor on November 21 for the clear-cutting of 260 hectares to begin work on the refinery.
Adán Augusto López Hernández, who was then governor-elect, responded to the complaint by saying it represented the efforts of people who wanted to block progress in the state of Tabasco.
In levying the fine, the ASEA said: “The probable offender was fined an amount consistent with the damages done and ordered to cease clearing activities. It was also ordered to present an environmental damage study and to proceed with wildlife preservation measures in the region.”
Cannabis gummies are coming soon to the Mexican market but cannabis beer is already here.
After three years, authorities have approved the sale of Cannabeer, an award-winning hemp brew from Barcelona that is the first cannabis beer to appear on Mexican shelves.
Like any other alcoholic beer, knocking back a few will have an inebriating effect but don’t expect to get high: Cannabeer contains no THC, the main psychoactive compound in marijuana, and doesn’t even have a cannabis flavor.
Angélica Gálvez, the brand’s distributor in Mexico, told the newspaper Milenio that despite popular stereotypes both hemp and marijuana can actually be beneficial to one’s health.
“Hempseed is a seed that is known for its benefits such as high contents of protein, essential amino acids and Omega 3 [fatty acids] . . . I dare say that the [cannabis] beer is a healthy product,” she said.
“If you drink five, you’ll get drunk like you would with any other beer but it’s because of the alcohol, not the hemp. It won’t give you a psychoactive effect . . . the beer is classified . . . to be sold as a craft beer not a CBD [cannabidiol],” Gálvez explained.
Cannabeer, whose label features a cannabis leaf, comes in two varieties: la original, a brown ale, and la dorada, a blonde ale.
Both contain the same amount of hempseed but its flavor is virtually undetectable to the untrained palate.
“The seed doesn’t affect the flavor at all. There are connoisseurs that have told me that it has a light tone that they can’t place . . . It’s not herbal but it’s something that’s different to other beers,” Gálvez said.
After going through a long bureaucratic process to get Cannabeer into Mexican stores, bars and restaurants, Gálvez hopes that people put their prejudices to one side and take to the beer, which retails for between 75 and 120 pesos a bottle.
“I think that we have to learn that there is no good or bad. Everything is bad in excess, even water. There were moments in which I doubted the license [would be granted] . . . but I was always conscious that it’s a normal process for something that’s a pioneer,” she said.
“It’s the first product that’s going to open the door . . .”
A view of Hacienda Tovares from the hill above the property.
From sipping wine in lush green vineyards to sampling some of the many fine Mexican cheeses, the “Ruta de Queso y Vino” (Wine and Cheese Route) in Querétaro has it all.
The semi-arid desert and high altitude of the region provides the perfect climate for vineyards to thrive, and the area has become one of the most important gastronomic destinations in Mexico.
However, as the market for organic foods and wines increases around the world, much of Mexico’s organic food finds its way to foreign countries, with just 2 percent of production staying within Mexico. As part of my visit to Querétaro, I wanted to find out more about the organic farms and vineyards that are providing tasty and healthy alternatives for the Mexican market, both local and national.
We based ourselves in the pueblo mágico (magical town) of Tequisquiapan, a colonial town which serves as the traditional starting point for the Ruta de Queso y Vino. From Tequisquiapan, numerous tour providers take visitors to many popular vineyards and cheesemakers, including Freixenet, La Redonda and Cava de Quesos Bocanegra. However, as we had a specific agenda in mind, we chose to arrange our own tours.
Our first stop was Viñedos Los Rosales, a 10-minute drive from Tequisquiapan. Founded in the early 1970s, the winery started with seven hectares of Salvador grapes imported from Argentina and Chile, which they sold to other wineries.
In 2011 when the property was purchased by the current owners, they began making their own organic, artisanal wines in house. Today, the vineyard includes well-organized rows of cabernet sauvignon, malbec, merlot, chardonnay and muscat on their 12 hectares of land.
A horse eating in front of the stables and hostel at Hacienda Tovares.
Switching to organic growing came with a new set of challenges, primary among them how to manage the chicatanas, or leafcutting ants. The giant brown ants arrive with the rains at the beginning of July and proceed to eat the leaves and fruit on the vines.
To combat this plague, the workers use a natural insecticide made of fermented orange peels and spray down each plant by hand.
Managing the pests is not the only task that’s done manually. In fact, almost every stage of production involves manual labor, from picking the grapes off the vine down to labelling the bottles. We watched as three employees sat in a small bright room inside the winery’s main building and placed the eye-catching labels precisely onto the full bottles of wine.
As I worried they might enlist my help, I promptly ensured that I lacked the coordination required by heading off to sample some of their wines.
First up were the dry and semi-dry wines from the Misiones Chapelet line. I found them both sweet, earthy and fruity, and unlike any other wine I’ve tried. As a dessert wine, both are excellent. Next, I tried their Puerta de Cielo line, a blend of malbec, cabernet sauvignon and merlot. Between the semi-dry and regular varieties, I preferred the regular, which was full-bodied and earthy. It would pair well with a hearty meal and red meat.
Interior of the Pirul Room, Hacienda Tovares.
As tempting as it was to stay and sample more of the wines, we had to move on to our next destination. We travelled north along Highway 120 past Cadereyta de Montes to the front gates of Hacienda Tovares.
As we continued down the narrow gravel road to the entrance of the 17th-century building, I could tell from the vast expanse of desert and rolling hills encompassing the hacienda that it offered far more than just an organic farm. And I certainly wasn’t disappointed.
Guests can participate in many activities at the hacienda, including kayaking, cycling and yoga. Perhaps most interestingly there are 36 horses that are used for carriage rides, horseback riding and equine therapy. Above the horse stables is an event space and 64-bed hostel-style accommodation. If shared rooms aren’t your style, they also offer an eight-room boutique hotel.
The most unique suite is the Pirul, which has a sizable tree reaching up through the ceiling into the second story. Next to the hotel sits the main building, dating from the mid-1600s and renovated in 2013. The building hosts a small altar, the administration offices and, in the central courtyard, an open-air restaurant, mostly supplied by the in-house farm, which is what we came to explore.
Our guide Magdelina and cook Gustavo led us through the organic farm, where they grow everything from pomegranates and pears to chiles and avocados. The 28 gardens are spread around the grounds, and tidy pathways allow visitors to walk through the vibrant green fields.
Next to a small lake is a new vineyard, and they hope to make their own wine soon.
A path leading to the shop at Rancho La Hondonada.
On the hill at the back of the property they’ve set up a beekeeping area to harvest honey, and the grounds also offer room for various farm animals including chickens and sheep. The majority of the produce is destined for their farm-to-table restaurant, which we visited next.
For starters, we tried crema de camote, a vibrant yellow yam soup that was creamy and sweet. For my entree I had the pechuga de pollo con mole xoconostle, a sliced chicken breast served with yellow rice and grilled zucchini, and served in a bright red mole. The mole had a mild spice, and the chicken was perfectly tender.
My girlfriend had albóndigas estofadas, stewed meatballs stuffed with nuts and dried fruits, and served in a tomato sauce. As we enjoyed our meal, we listened to the birds singing and relaxed in the airy courtyard.
The next day we made our way to the town of Colón, where Rancho La Hondonada is based. The ranch produces the milk and cream used to make the artisanal cheeses, yogurt and butter for Flor de Alfalfa, a favorite Mexican artisanal dairy brand.
Our host, Joel Olguín, led us on a tour of the ranch. We started in the milking facility, through which many of the 2,000 Jersey cows on the ranch rotate twice a day to produce between 22 and 25 liters of milk each.
Every stage of the milking process is designed to reduce stress on the cows, from the machines that automatically detect when their milk is running low to the music they play while milking.
Misiones Chapelet semi dulce wine made with Salvador grapes by Viñedos Los Rosales.
As Olguín casually mentioned, “the area is like a spa, as they’re covered from the sun and the rain and each is fed an individual diet while they milk.” The cows are raised without the use of antibiotics or growth hormones, and are free to graze in pastures that contain no chemical fertilizers or pesticides.
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Next we visited the cheese cave, which was built two years ago to begin making aged and mature cheeses. Beside the aging room we sat at long tables to have a light breakfast and sample a few of the cheeses. We tried adobera, campanelo and a montañés cheese, with the medium-hard texture and neutral flavour of the montañés being my favourite.
We finished the day and our excursion in the small shop at Rancho La Hondonada, where we made our final purchases of cheese and yogurt to indulge in back at our hotel.
With our trip exploring a few of the organic farms of Querétaro at an end, I can truly say the Ruta de Queso y Vino has some fine options for organic and artisanal products to enjoy within Mexico.
The Canadian auto workers’ union today urged consumers in Canada and the United States to boycott General Motors (GM) vehicles made in Mexico to protest against the planned closure of Canadian and U.S. plants.
The Unifor union asked motorists not to buy trucks or SUVs with vehicle identification numbers that start with three, which indicates that they were assembled in Mexico.
The union said it would publicize the boycott with television, newspaper and billboard advertisements in both Canada and the United States.
GM announced in November that it planned to close its factory in Oshawa, a city around 60 kilometers northeast of Toronto.
Around 2,600 blue-collar workers will lose their jobs.
The Detroit-based company also has plans to close four factories in the United States although it will negotiate those with the United Automobile Workers (UAW) union.
The UAW has not yet added its voice to the boycott call but Unifor’s national president, Jerry Dias, said that the two unions are planning to hold talks early next month.
The factory closures are part of a restructuring strategy that will cut a total of 14,000 GM jobs.
The company is aiming to cut costs to focus capital spending on the development of autonomous and electric cars.
It has said that it has too many car-producing plants at a time when the markets of both Canada and the United States are shifting towards trucks and SUVs.
But Dias accused GM of planning to close plants in those two countries while increasing production in Mexico, where wages of auto sector workers are much lower – US $2 an hour, according to the Unifor chief.
“We’re asking you to stand up to Greedy Motors,” he told a press conference in Toronto today.
Dias said that in 2016 talks, GM agreed to keep the Oshawa plant open until 2020. Now he wants the company to commit to talks about keeping the factory open permanently.
GM currently makes Chevrolet Equinox and GMC Terrain small SUVs in Mexico as well as full-size GMC and Chevrolet pickup trucks, the Blazer SUV and the hatchback version of the Chevrolet Cruze compact car.
Mexico, Canada and the United States reached a new trade deal late last year that stipulates that 40% of auto content must be made in high-wage areas where workers make at least US $16 per hour.
However, the United States-Mexico-Canada Agreement (USMCA) is not expected to take effect until next year after ratification by the respective legislatures of the three countries.
The Coahuila Wines brand, a project involving 22 partners in the wine industry, has won a Gourmet Excellence 2018 award at the International Tourism Fair in Spain.
The award was given in recognition of the Coahuila Wine Association’s creation of the brand, which has seen enormous growth since its beginning in 2014.
The area of land devoted to growing grapes has grown from 400 to 1,000 hectares and the number of wines has grown from 30 to 100 different offerings of red, white, and rosé wines that have won 29 national and international awards in the four years since the brand’s creation.
In 2017, Coahuila Wines produced more than four million bottles, 8.5% of national production.
The brand’s partner companies employ more than 1,500 families in the region, which has also seen an increase in tourism.
The state government provided support to the brand with publicity such as a special edition by Mexico Desconocido magazine along with a video that can still be found on the magazine’s website.
Coahuila faced stiff competition from countries all over the world with 50 different projects nominated in the innovative gastronomical projects category. Coahuila Wines was among the top 10 selected.
The prize was created in 2005 by the international communications conglomerate Excellence Group to promote excellence in markets associated with tourism and culture in the Ibero-American world.
