Mexico Bolsters Fuel Adulteration Defenses: New Regulations

Mexico is intensifying its battle against fuel adulteration, with new regulations from the Agency for Safety, Energy and Environment (ASEA) coming into force and the industry facing increasingly sophisticated methods of illicit fuel manipulation. This ongoing challenge not only impacts vehicle performance and tax collection but also poses significant environmental and public health risks.

Andrés Gutiérrez, CEO and Co-Founder, CIEFSA, a key player in Mexico's fuel quality control, highlighted the escalating sophistication of fuel adulteration and the challenges of inconsistent regulatory enforcement. CIEFSA, formed in response to the 2014 energy reform and the need for fuel standardization, was among the first to expose widespread adulteration starting in 2019, when import permits began to be canceled and non-standard chemicals were detected in fuel.

"Over time, as we developed methods to detect adulteration, the informal market continuously refined its methods of adulteration and concealment. We became acutely aware of this ongoing evolution," Gutiérrez told MBN.

The problem, often referred to as huachicoleo (fuel theft), has evolved to include huachicoleo fiscal (tax evasion through fuel fraud) and outright adulteration. A study conducted in 2024 for the Mexico City Ministry of Environment, prompted by numerous environmental contingencies, concluded that adulterated gasoline can pollute up to 120% more than unadulterated gasoline, contributing to increased ozone levels.

The new ASEA regulation aims to bolster fuel quality standardization, requiring a copy of reports issued by the National Energy Commission (CNE) for verification. Gutiérrez Torres noted that ASEA's tighter deadlines mean it is critical for companies to conduct tests well in advance. These reports will now serve multiple authorities, including CNE, ASEA, the tax administration system (SAT), and the prosecutor's office, all actively pursuing adulterated fuel at stations.

A significant challenge lies in the supply chain. While gas station owners are penalized for selling adulterated fuel, Gutiérrez explained that the problem often originates upstream. "Generally, the product arrives already adulterated," he stated. "Thus, the weak link or focus point is the period between when the product leaves the storage terminal and when it arrives at the station." He emphasized that stations must implement rigorous quality control measures upon receipt, as they bear the ultimate legal responsibility, including criminal penalties.

The methods of adulteration have become increasingly complex. Initially, it involved adding alcohols, which could be easily detected due to their impact on octane. However, adulterers soon began blending naphtha with alcohols to achieve acceptable octane values, making detection more difficult. More recently, the illicit market has introduced solvents and aromatic compounds, and even unidentified substances that comprise a significant portion of the fuel (36-40%) while still passing standard quality parameters, except for an unexplained drop in vapor pressure.

CIEFSA is advocating for more comprehensive testing beyond basic parameters, suggesting monitoring vapor pressure, oxygenate content, and aromatics to effectively detect sophisticated adulteration.