Huachicoleo Surges as a Growing Threat in Mexico

PEMEX has been waging a relentless battle against clandestine fuel taps. The latest figures, extending until August 2023, reveal that PEMEX has spent over MX$28 million (US$1.6 million) to seal off these illegal connections to gas pipelines within the state of Puebla. The numbers tell a story of escalating efforts: from MX$170,144 (US$9,816) allocated in December 2018 to address four fuel thefts, to an ever-increasing investment as the incidence of this crime soared over the following years.

In 2019, 916 clandestine taps were detected only in Puebla, prompting PEMEX to spend MX$72.82 million to combat the issue. The trend continued in 2021, with 1,462 illegal siphoning incidents and an expenditure of MX$68.16 million. In 2022, the investment decreased to MX$33.66 million for 669 clandestine taps. 

Just months after taking office, President López Obrador closed essential pipelines in the north of the country to drive down thefts and thus save lost revenue. This ploy was successful but unsustainable. During that time, fuel shortages were reported throughout the north of the country. The PEMEX Business Plan (2019-2023) also specified fuel theft as a primary target within the timeline and described how PEMEX must make sure it “ensures the physical integrity of facilities and information systems.”

Concerns over 'huachicoleo' are not limited to their financial implications and to one state in the country. Salvador Carrejo Orozco, President, Coparmex Chihuahua, has expressed apprehension regarding the surge in fuel theft in the northern region of Chihuahua. He emphasizes the unfair competition that this practice poses to legal distributors and the resultant impact on the hydrocarbon market. Carrejo Orozco advocates for leveraging technological resources, suggesting that the government, particularly PEMEX, could employ advanced technologies such as drones to detect immediate pressure changes indicating illegal drains.

Beyond economic concerns, the rise in illicit activities has led to increased violence in the affected regions. Criminal groups vie for dominance in this illegal trade, resulting in a wave of violent incidents. Carrejo underscores the negative repercussions of this collateral effect, emphasizing the need to address both the root cause and the violent aftermath.

"We are concerned about the phenomenon, like any illicit activity. We are concerned about what this may represent in terms of unfair competition within the hydrocarbons industry. There are many players, fuel distributors, who play by the rules, who play fair, and well, this phenomenon puts them at a clear disadvantage with this illegal activity," asserted Carrejo.

Adding to the narrative is Ricardo Ruiz, Secretary of Government, who reveals that the Mexico City government maintains a continuous dialog on combating 'huachicoleo.' When notified by PEMEX of clandestine taps, the government provides logistical support for immediate action. Various operations have been conducted, primarily in the Iztacalco municipality.

Between 2018 and October 2023, 168 clandestine fuel taps were discovered in Mexico City, with Tlalpan and Azcapotzalco accounting for 73% of these incidents. The city government acknowledges the ongoing challenge and remains committed to addressing the issue through a combination of information-sharing and targeted operations.

'Huachicoleo' emerges as a multifaceted threat to Mexico's energy security. Beyond the financial toll, its ripple effects extend to unfair competition, violence, and strains on public resources. A collaborative effort between government agencies, private entities, and technological solutions is imperative to curb this escalating menace and safeguard the integrity of Mexico's energy infrastructure.