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  HOME | Mexico

Theft of Fuel from Mexican Oil Company Rooted in Corruption, Organized Crime

MEXICO CITY – The massive theft of fuel from Mexican state oil company Petroleos Mexicanos (Pemex), a scourge that leftist President Andres Manuel Lopez Obrador has sought to tackle early in his administration even though the crackdown has led to nationwide shortages, is a decades-old problem that is rooted in corruption, impunity and the spread of organized crime.

Award-winning journalist Ana Lilia Perez, who has studied Pemex for the past 20 years, says the fuel-theft phenomenon began in the 1980s when the company’s workers began stealing gasoline and diesel in small quantities from storage terminals and refineries.

“The oil worker’s logic was that if senior (company) officials were stealing they could steal too,” the author of the 2011 book “El cartel negro” (The Black Cartel), which looks at how the tentacles of organized crime extended to Pemex, said Friday in an interview with EFE.

Perez said that Pemex – founded in 1938 when Mexico’s oil industry was nationalized – was used for decades by its directors as an inexhaustible source of cash used to buy luxury items, noting that that high-level corruption had a ripple effect on the entire company.

The fuel-theft problem steadily grew worse and by the late 1990s hydrocarbons were practically being stolen right off drilling rigs, although the theft was officially explained as “natural evaporation losses.”

During former President Vicente Fox’s 2000-2006 administration the crime was linked to organized crime, and the problem continued under his successor, Felipe Calderon. even though it had been “perfectly identified,” Perez said.

The journalist said that in Mexico’s northern and Gulf of Mexico regions the Los Zetas and Gulf cartels formed an alliance to steal gas condensate throughout the mostly onshore Burgos Basin.

“It was a big business ... with the collusion of Pemex workers,” the expert said, adding that many employees voluntarily worked for organized-crime groups but that others were threatened by the gangs.

In addition to the theft of fuel from pipelines, known in Mexico as “milking,” a parallel infrastructure emerged. Organized crime groups even installed their own ducts that ran to the United States and the fuel-theft racket extended as far as the central state of Guanajuato.

But with Lopez Obrador’s inauguration on Dec. 1 the government is now waging an all-out battle against a crime that caused losses for Pemex estimated at 65 billion pesos ($3.4 billion) in 2018 alone.

More than 8,000 soldiers have been deployed to bolster security at pipelines and the fuel eventually sold at service stations is being transported around the country via tanker truck instead of by pipeline, a strategy that has led to severe gasoline and diesel shortages in at least 10 states, as well as the Federal District (Mexico City).

“For the first time, there’s a recognition that the problem of corruption began on the inside,” the expert said, noting that the president has “uncovered a rat’s nest.”

 

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