Date first published: 04/08/2020
Key sectors: oil and gas; commercial assets; public security
Key risks: damage to infrastructure; violent crime; revenue loses
Fuel theft – locally known as ‘huachicoleo’ – remains untameable across Mexico. On 2 July state-owned oil firm Pemex reported a 114 per cent year-on-year increase in illegal tapping during the first four months of 2020, during which authorities recovered 9,291,986 litres of stolen fuel with a commercial value of MXN157m (around US$7m). Most incidents were registered in Hidalgo, Puebla, Mexico, Guanajuato and Veracruz states. While ‘huachicoleo’ pre-dates the COVID-19 pandemic, fuel theft gangs appear to have benefitted from the disruption it has caused.
President Andres Manuel Lopez Obrador (AMLO)’s government has prioritised the fight against fuel theft since taking office. In January 2019 5,000 federal troops were deployed to Pemex facilities in the worst affected states, all regularly targeted pipelines were closed and the licenses of gas stations selling stolen fuel were cancelled. In January 2020 Pemex reported a 91 per cent decrease in registered thefts in 2019, saving the firm approximately MXN32.6m (around US$1.5m).
Yet any apparent success has been short-lived. During the first months of 2020, the removal of stolen fuel from circulation produced severe shortages, making ‘huachicoleo’ an even more attractive activity. Moreover, tactics to circumvent AMLO’s measures diversified. Fuel thieves built networks of underground tunnels to transport stolen fuel without detection in Puebla, Nuevo Leon, Hidalgo, Guanajuato, Tlaxcala and Mexico states. They also exploit redundant pipelines to transfer oil from operational lines into their containers. On 16 July the seizure of three-tonnes of stolen piping metal extracted from 23 different sections of a pipeline in Chiapas state raised alarms on the threat posed to the cylinders themselves.
There are considerable associated security risks. Competition between rival gangs to control this lucrative market has contributed to a spike in violence in their areas of operation. Worst affected is Guanajuato state, where on 19 June at least eight bystanders, including two children, were killed amid clashes between Cartel Jalisco Nueva Generacion (CJNG) and Cartel Santa Rosa de Lima (CSRL). Security forces are also recurrently targeted. At least 60 police officers have been killed by criminal gangs in Guanajuato state so far in 2020, compared to 75 in 2019.
COVID-19 is accelerating these trends. Security forces have been instructed to enforce pandemic-related restrictions and patrol key areas such as hospitals and medical supplies, leaving fewer resources available to fight against overall crime, including fuel theft. Public discontent with AMLO’s handling of the health crisis has allowed criminal groups to accrue political capital by providing aid and economic opportunities to local communities, while economic hardship tends to render public officials more susceptible to bribery and collusion. AMLO has been quick to blame the increase in fuel theft on Pemex employees. On 15 July he cited “collusion between crime and bad officials” as a central contributor to the issue.
Although security force efforts have increased, longstanding success remains evasive. Recently discovered fuel theft tactics can now be monitored, but resources to do so are scarce. High profiles arrests have been made. On 2 August CSRL’s alleged leader ‘El Marro’ – known as a ‘fuel theft king’ – was arrested in Guanajuato. Yet this will likely trigger retaliatory attacks as seen in June following the arrest of ‘El Marro’s’ mother and sister. A combination of overstretched resources, economic insecurity and public discontent will continue to provide fertile ground for organised crime – including fuel theft – to thrive.