Peña Nieto’s administration shows highest fuel theft rate in history

Between 2013 and 2018, organized crime groups conducted an average of 18.2 perforations per day
Peña Nieto’s administration shows highest fuel theft rate in history
In May 2017, the minister of finance, José Antonio Meade Kuribreña, estimated that the tapping represented an economic loss of between 15 and 20 billion pesos - Photo: Hilda Ríos/EFE
09/10/2018
13:49
Noé Cruz Serrano
Mexico City
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Mexico’s current administration will close its cycle with the highest rate of illegal tapping in the country’s history ever since this type of crime began being formally reported in 2010. In six years time, illegal tapping conducted by several criminal groups at Mexican Petroleums (PEMEX)’s pipelines could rise above 40,000 perforations, according to experts. The state-owned oil company will publish the results between October and November.

Between January 1, 2013 and November 30, 2018, organized crime groups conducted an average of 18.2 perforations per day along the country’s pipeline network, which has an extension of 10,563 miles. “This is crazy, and it has become a gigantic problem. We need to consider that they are stealing a fortune that will not go to schools and children, but to the cartels, who only use it to conduct their illegal activities,” stated the director of the oil company, Carlos Treviño Medina.

“Illegal perforations aside, what these criminals do with the money is far worse. They use it to buy weapons, to pay their informants, and keep breaking the law while doing great harm to PEMEX and Mexico,” he added.

Drug cartels specializing in fuel theft and other small criminal groups have conducted an average of 2.3 illegal perforations along each kilometer of the national pipeline network, focusing on specific states and municipalities such as Puebla, Guanajuato, Hidalgo, Tamaulipas, and Veracruz, among others.

In an interview with EL UNIVERSAL, the director commented that the cost of fuel theft rose to over 30 billion pesos a year.

In May 2017, the Secretary of finance, José Antonio Meade Kuribreña, estimated that the tapping represented an economic loss of between 15 and 20 billion pesos. However, in March of the present year, the director of PEMEX stated that the sum rose above 30 billion.

“It is one thing to calculate the product value of fuel stolen from PEMEX, which is estimated at 20 billion a year, and another to talk about repair costs and the cases in which the perforations jump out of control and the company is forced to remedy environmental and social damage, specially when there are explosions,” he explained, adding that the team of Mexico’s upcoming administration had also manifested their concern regarding fuel theft.

When taking into account the number of illegal perforations conducted on the oil company pipelines in the past six years, fuel theft is now 42 times higher than it was during the 2001-2006 administration, and 7.7 times higher than in the 2007-2012 cycle.

According to the engineering company EnergeA, the increase in fuel theft is related to a combination of factors, one of which is the weakness of Mexico’s current legal framework: “Fuel theft is a serious crime and it has increased exponentially since 2008. Although the federal law to prevent and sanction crimes related to hydrocarbons came into force on January 11, 2016, its effect in the fight against fuel theft is still uncertain.”

The company added that the current legislation only considers the areas of Exploration and Production, according to the Article 28 of the Constitution. The rest of the oil company’s infrastructure is left unprotected, causing the illegal tapping of fuels to remain in a gray area.

PEMEX’s Sub-directorate of Strategic Safeguarding revealed that the increase in illegal perforation came as a result of “Mexico’s growing violence and criminal activities.”

In their most recent report delivered to the Mexican Stock Exchange, the oil company told in detail that the country “has undergone a crime increase, mainly related to organized crime groups and drug cartels, which has triggered the development of an illegal fuel market, leading to an increase in theft and illegal trade of national fuels, in spite of the federal government’s efforts and measures to strengthen military and police forces.”

EnergeA stated that the changes were necessary. “Until now, the quantitative dimensions of the theft of hydrocarbons in Mexico remain unknown,” since there is no exact method to estimate the amount of fuel that has been stolen. There are also institutional limitations, such as a lack of capacity to react to the crime. There have been few cases in which the Attorney General’s Office conducts a formal investigation, but both federal and local authorities have shown reluctance to provide further details, fearing their cooperation might break conditions of confidentiality and secrecy.

The director of PEMEX informed that the oil company was developing an app for their employees to report tappings more efficiently, which will increase their capacity to conduct repairs. “With this app, PEMEX is confident that the problem will be reduced considerably,” claimed Treviño Medina.
 

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