Companies linked to state-run fuel company implicated in fuel theft

As many as 13 franchises that are connected to the country’s state-owned fuel company Petroleos Mexicanos, better known as Pemex, are currently being investigated for being in the trade of fuel theft.

As Mexico’s national strategy to redirect fuel nears the end of its second week, the government has claimed that redirection has led to the saving of vast amounts of money already, as the clamp down on the country’s corruption and organised crime groups continues.

So far however, 16 companies have had their accounts frozen due to suspicions of ‘huachicoleo’ activity – with the majority of them appearing to be linked to the country’s national oil company. The news was released by Mexico’s Secretary of Security and Citizen Protection, Alfonso Durazo Montano, at a recent conference aimed at explaining what progress the fuel shortages have made, explained Heraldo De Mexico. In the statement the official also went on to explain that there have so far been 11 arrests and 2,605,136 litres of Pemex hydrocarbon recovered.

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Although the 13 Pemex-linked companies do not have fuel import permits, a series of unusual payments and financial agreements brought the companies into suspicion. Their dubious dealings do not, then, involve acquiring fuel from Pemex but have seen the sale of gasoline to take place. According to the official statements of the investigation, a net profit of 6,758 million pesos (US$350 million) was not reported to the Tax Administration Service. All 16 companies have had their accounts blocked whilst the investigation continues.

The latest revelation addresses the scope of corruption which is taking place throughout the country’s largest energy businesses, and furthers their connections to government officials. As well as catering to the country’s elite, however, fuel theft has also grown in popularity with local crime cartels. 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.

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. What recent investigations have discovered, however, is that corruption and theft have also greatly contributed to the country’s oil crisis.

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Although queues continue to form at petrol stations around the country, the fuel shortages do not mean that the country’s fuel supply isn’t sufficient claims the government. 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.

With assurances that the fuel shortage will eventually level out, a further 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 a continued push to reduce gang-related fuel theft.

The formation of the Inter-Institutional Intelligence Committee, created to identify where fuel theft is coming from and made up of members from the Ministry of the Navy; the Ministry of National Defence; the Attorney General’s Office and Federal Police Investigators will also contribute to a strategy of increased security.

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