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Analysis

Incidences of Huachicoleo on the Rise

By Conal Quinn | Wed, 05/11/2022 - 18:07

Huachicoleo, as fuel theft is popularly known in Mexico, remains widespread in large regions of the country. According to figures released this week by PEMEX, incidences of fuel theft from the NOC’s pipelines have increased by 32 percent in the past year. In the state of Guanajuato alone, PEMEX’s 2021 statistics showed that, on average, incidents were reported every 27 hours. Despite the renewed efforts to contain the crime, these statistics suggest fuel thieves are setting new highs. 

 

PEMEX's records, obtained via the National Transparency Platform, indicate that the problem has grown significantly in the first half of the current administration, with the number clandestine fuel thefts totaling 35,196, or 32.1 per day on average. In contrast, in the same period under Enrique Peña Nieto's government, there were a total of 11,499 incidents recorded, or 10.5 per day. Under Felipe Calderón’s administration between 2007 and 2009, there were 1,178 thefts, or 1.07 per day.

 

In the first month of 2022 alone, PEMEX's Department of Strategy, Security and Monitoring reported 1,076 thefts, almost 35 a day. This represents the second worst January since records of fuel theft began, surpassed only in January 2019, when 1,567 clandestine operations were recorded. The single largest act of huachicoleo occurred that same month, when 12,214.69L of jet fuel were sent from the Azcapotzalco storage terminal to an ASA terminal but never reached their destination.

 

The federal government, through the Ministry of Security and Citizen Protection (SSPC), states that between January and April 19, 2022, total losses accrued due to illicit fuel tapping amounted to an average of 6.6Mb or 1 million L/d, with an estimated economic loss of MX$20 million (around US$1 million). Despite the government’s strategy to combat oil theft by protecting the integrity and stability of the pipeline system, through the joint participation of PEMEX’s Strategic Security Department, the Ministry of National Defense (SEDENA) and the Navy (SEMAR), results show a deteriorating situation. The government strategy involved the deployment of more than 5,000 troops from the armed forces and federal police to guard the NOC’s pipeline network. Importantly however, only seven of PEMEX’s 54 hydrocarbon pipeline networks are equipped with automated control systems which detect and locate pressure leaks, allowing for a rapid response time from law enforcement. This leaves 47 pipelines vulnerable, especially in rural areas.

 

Ricardo Sheffield Padilla, Head of the Federal Consumers’ Protection Office (PROFECO) also warned this week that an estimated 6,000 illegal LP gas delivery units operate across the country which do not comply with the law and are not registered with the CRE.  Sheffield emphasized that removing these units from the market should be a top priority .President López Obrador, meanwhile, has consistently warned of the immense danger posed by oil leaks resulting from huachicoleo, with the tragedy of 2019 Tlahuelilpan pipeline explosion still fresh in the national consciousness. 

 

Another notable trend gleaned from the official statistics released for January of this year is the concentration of huachicoleo, which is largely limited to just five states. Approximately 82 percent of all reported fuel tappings were isolated to the states of Puebla, the State of Mexico, Guanajuato, Veracruz and Hidalgo. Furthermore, just 18 municipalities across those states accounted for 97 percent of all instances of huachicoleo.The black market trade is so prevalent in these states that toy huachicolero trucks can even be purchased as gifts for children. However, LPG distributors have suggested that such data will help them  carry out intelligence operations across highways and distribution routes in the hotspot areas to prevent further incidents. 

 

As one of the states with the highest number of clandestine tappings, authorities have started honing in on Puebla in an attempt to snuff out the illicit trade. Just last week, members of the Specialized Prosecutor's Office for the Investigation of High Incidence Crimes undertook a major operation in the municipality of San Martin Texmelucan. At the crime scene, investigators seized 15 LPG gas tanks,10 of which had Tlaxcala registrations, three were registered in the State of Mexico with a further two had no license plates. Additionally, in the same state last Tuesday, a man was reported dead following the collapse of a tunnel beneath a PEMEX pipeline. During the unsuccessful rescue attempt, state police discovered an excavation which led directly from a PEMEX pipeline to a clandestine outlet used by drug traffickers. The 400m long tunnel is believed to have been used to extract fuel from the PEMEX Tuxpan-Azcapotzalco pipeline, in the ejidos of Cuautlancingo, next to the train tracks in Otumba.

 

It has even been reported that an increasing number of minors are being recruited for huichicoleo, a concerning development made apparent by arrest records which indicate that more and more children and adolescents are taking the fall to protect higher-ups in the illegal operation. According to the Attorney General’s Office (FGR), children are used as "hawks'' and lookouts around pipelines that are preyed upon by organized crime groups, and subsequently tasked with distributing the product over social media.This growing trend was also reported on by International NGO, Save The Children, who revealed that over 30,000 children have been forcibly recruited into the illicit trade in recent years, with gangs targeting marginalized communities in particular. 


 

While individual incidences of huachicolero may be on the rise, the total volume of fuel stolen, and by extension the financial burden, has significantly decreased. In the first half of Peña’s Nieto’s government, huachicoleo cost PEMEX an estimated MX$11.3 billion, compared to just MX$2.5 billion worth of financial damage under López Obrador. Furthermore, the efforts of the current administration have led to a 93.2 percent drop in the barrels per day of fuel lost to theft, with data showing fuel theft plummeted from 74Mb/dpd on the day López Obrador assumed office to an average 5Mb/d as of fall 2021.

 

This can perhaps be attributed to the degree to which corruption plagued PEMEX under the previous administration.  In the high-profile New York trial of drug king-pin Joaquín ‘El Chapo Guzmán’, the extent to which criminal gangs had taken advantage of PEMEX’s distributions networks to smuggle hard drugs was revealed in the prosecution’s evidence. Furthermore, during the previous sexenio, the looting of PEMEX products was frequently disguised as company losses through double billing. Such instances of huachicoleo could not have been so widespread and endemic without insider information aiding and abetting the bandits. By contrast, the dramatic surge in the reporting and documenting of such criminal acts perhaps suggests greater transparency and an end to the cover-up operations. 

 

López Obrador has made tackling corruption at the heart of state institutions a key pillar of his administration. Rescuing PEMEX from the throes of both blue and white collar crime alike is part and parcel of this process. López Obrador blames the ease with which the NOC was able to be infiltrated by drug cartels on the neoliberal policies of his predecessors, which he believes hollowed out the state from within. Undoubtedly, huachicoleo will continue to constitute a tangible metric by which the success of the president’s crusade against corruption can be quantified.

The data used in this article was sourced from:  
El Universal, El Financiero, Publimetro, La Jornada, El Milenio, Aristegui Noticias, La Silla Rota, Oil and Gas Magazine
Photo by:   Wikipedia Commons
Conal Quinn Conal Quinn Journalist & Industry Analyst