Fuel shortages continue to cause chaos across six states

Fuel shortages continue to affect six states across Mexico after weeks of disruption caused by delivery logistics, claims state-run oil company Pemex.

Long lines have reportedly formed across a number of Mexico’s largest cities as residents queue to collect gasoline, whilst authorities work to redirect gas delivery in a bid to stop fuel theft by organised crime groups.

The shortages are taking their toll on a number of densely populated cities where, after hours of queuing, some petrol stations are running dry. The government has explained they are uncertain when the shortages will stop, yet confirm that the delivery logistics shake-up has been effective in deterring fuel theft.

Mexico’s wide-scale fuel-stealing industry sees Mexican cartels capitalise on taking fuel from government-run piping. There are on average 60 illegal taps into pipelines daily within the country.

What leads cartels to steal fuel is the opportunity to profit from a less complex industry than that of narcotics. Rather than having to move drugs overseas, the stolen fuel can be profited from within Mexico and allows for cartels to become more powerful with greater ease. In the space of just four years, the number of oil thefts had quadrupled by 2016 and following on from the splinters occurring in Mexico’s most notorious cartel organisations, the amount of smaller gangs looking to make money continues to grow.

Speaking to Reuters, one oil refinery worker spoke of how he had been contacted by cartel members who wanted his help. According to the report by the pump worker, the cartel had resorted to beatings and torture to get information on the time and location of oil movements, until he was forced to seek asylum overseas.

Despite clampdowns by Mexico’s former governments on the drug trade, oil theft has offered a new means to make substantial money at less of a risk. However new president Andres Manuel Lopez Obrador had committed to stopping fuel theft as part of his campaign promises, and has now begun bringing those plans into fruition.

According to statements from Mexico’s government, the fuel shortages do not mean that the country’s fuel supply isn’t sufficient. Many representatives have at length ensured that Mexico continues to have enough gasoline, and the delays which have been increasing since December are only related to the clamp down on fuel theft. In response, Pemex has promised to increase distribution and provide 20% more fuel to affected states.

In recent years, however, Pemex reported declines in gasoline production and in 2017 the company produced just 1.7 million barrels of crude oil, with coming years predicted to have another consecutive decline in oil production, a trend for the past 14 years.

The oil refinery losses have seen the country register some of the worst oil production statistics this year as well as having to call on imports from neighbouring countries such as the U.S, totalling 75% of oil litres coming from overseas, which AMLO has promised to change.

There are a number of reasons why Pemex has struggled to maintain their refining levels, which saw the company close the second quarter of 2018 with a net loss of US$8.2 billion (163.16 billion Mexican pesos). The losses have been blamed on logistics as well as overuse of the networks of pipelines and higher import costs. A reassessment of the entire system is predicted to see AMLO focus on the production of more expensive oil products and gasoline for more profitability, as well as his continued push to reduce gang-related fuel theft.

In the meantime, motorists across large states such as Guanajuato, Puebla, Tlaxcala and Michoacan continue to wait in long queues in the hope that there will be some gasoline left. Andres Manuel Lopez Obrador has asked for patience as the government works to regularize the services again.

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