AMLO in Talks With Valero Energy Over Falsified Invoices
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AMLO in Talks With Valero Energy Over Falsified Invoices

Photo by:   valero.com.mx
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Conal Quinn By Conal Quinn | Journalist & Industry Analyst - Mon, 09/19/2022 - 16:02

President López Obrador confirmed this week that the government has initiated talks with US firm Valero Energy over reports concerning inflated invoices for fuel imports. The revelation was announced following discussions with a US delegation led by Secretary of State Antony Blinken concerning ongoing trade disputes between US companies and the Mexican government. 

In a press conference following the meeting with Senator Blinken, López Obrador assured the media that the talks relating to the USMCA were both “productive and amiable” and that his administration had managed to reach an agreement with most of the 18 US companies that had raised concerns over investment issues. The president added that should US companies be found to have engaged in fuel smuggling in Mexico, they will face severe penalties.

For its part, San-Antonio-based Valero has claimed it was unaware of the fraudulent import and sales documents, and insists it is not subject to an investigation. Instead, the falsified invoices are believed to have been forged by another entity. As a spokesperson explained to Reuters, "Valero has discussed some import and sales documents with the Mexican government that are believed to have been falsely created by unknown third parties.”

President López Obrador believes that elements of organized crime may have been using false invoices from Valero to smuggle fuel into Mexico. "We began to notice [Valero's] exaggerated invoicing of gasoline imports,” the President said. He explained that authorities found the sheer volume of fuel imports suspicious, as they far exceeded Mexico’s gasoline and diesel import requirements. It was therefore deduced that the discrepancies between the inflated invoices and the actual volume of fuel entering the country were due to fuel smugglers, “We have huachicoleros falsifying Valero's invoices,” López Obrador concluded.

In 2019, Valero, a Fortune 500 manufacturer and marketer of transportation fuels, announced it was expanding its operations in Mexico, signing a long-term agreement to boost supply chains through three new refined product terminals in Guadalajara, Monterrey and Altamira. Additional projects were also planned in Veracruz, Puebla, Mexico City Aguascalientes and Saltillo, which combined were set to expand Valero’s storage capacity to 5.8Mb, bolster supply chains to better reach both high-consumption metropolitan areas and remote locations alike as well as establish an import and distribution network that would see the US’ biggest refiner supply 40 percent of domestic demand in Mexico. 

However, private investment in Mexico’s fuel storage infrastructure was stalled by regulatory hurdles. The company’s ambitious US$1 billion attempt to double its fuel storage capacity in Mexico to 5.8 billion barrels and support its network of service stations was just one of Valero’s strategies.Before the 2014 Energy Reform, PEMEX held a monopoly on fuel storage. The NOC also oversaw the practice known in the industry as “selling tickets,” or subletting surplus storage. Since assuming the presidency, López Obrador has sought to restore PEMEX as the key market player.

Photo by:   valero.com.mx

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