Mexico’s state oil company Pemex has announced it will cease transporting fully refined gasoline and diesel fuel through its pipelines, a novel approach intended to combat pervasive oil theft, but nevertheless raises the question of its long-term effectiveness.

Pemex said it will begin sending “unfinished” fuel through its more than 14,000 km of Mexican pipeline. The fuel will require a final mixing before being suitable for use in motor vehicles and industrial processes, reported El Universal.

With the move, Pemex hopes to reduce fuel theft by criminal groups and deter customers from buying stolen gasoline.

According to CBC News, Pemex documented 3,674 illegal taps in its pipelines in 2014 -- a 70 percent increase over 2013. In just the first nine months of 2014, the company said it lost an estimated $1.15 billion to oil theft.

Eight of every 10 liters of gasoline transported in Mexico is moved via pipeline – a value of over $28.5 billion, reported El Universal.

Final mixing will now take place in the company’s 77 storage and distribution terminals located throughout the country, before fuel is sent out for final sale and consumption.

The company did not specify what steps of the refining process would be left unfinished, but advised customers to ensure they buy fuel from authorized gas stations and dealers to avoid potentially damaging their vehicle engines, reported CBC News. 

The change will take effect nationwide in two months.

InSight Crime Analysis

With this decision, Pemex demonstrates that it is thinking creatively about how to mitigate its losses to oil theft -- an activity that has become a massive source of revenue for Mexican organized crime and is a major threat to the country’s oil industry.

In theory, this move will make it more difficult for criminals to benefit from tapping Pemex pipelines. But it's also possible that criminal organizations will move into the business of refining the fuel themselves. Groups like the Zetas have already proven themselves capable of creating sophisticated distribution networks for stolen oil. 

It's also possible that criminal groups may simply begin targeting the storage centers where final refining will now take place, either by corrupting employees at these facilities or by forecfully interdicitng shipments of fully refined fuel.  

Overall, Pemex’s decision is a striking example of a company having to significantly adapt its practices due to criminal activity. The long-term benefits of this manuever, however, remain in doubt.

Investigations

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
Prev Next

The FARC and the Drug Trade: Siamese Twins?

The FARC and the Drug Trade: Siamese Twins?

The FARC have always had a love-hate relationship with drugs. They love the money it brings, funds which have allowed them to survive and even threaten to topple the state at the end of the 1990s. They hate the corruption and stigma narcotics have also brought to...

MS-13's 'El Barney': A Trend or an Isolated Case?

MS-13's 'El Barney': A Trend or an Isolated Case?

In October 2012, the US Treasury Department designated the Mara Salvatrucha (MS-13) as a transnational criminal organization (TCO). While this assertion seems unfounded, there is one case that illustrates just why the US government is worried about the future.

Ivan Rios Bloc: the FARC's Most Vulnerable Fighting Division

Ivan Rios Bloc: the FARC's Most Vulnerable Fighting Division

When considering the possibilities that the FARC may break apart, the Ivan Rios Bloc is a helpful case study because it is perhaps the weakest of the FARC's divisions in terms of command and control, and therefore runs the highest risk of fragmentation and criminalization.

The Infiltrators: Corruption in El Salvador's Police

The Infiltrators: Corruption in El Salvador's Police

Ricardo Mauricio Menesses Orellana liked horses, and the Pasaquina rodeo was a great opportunity to enjoy a party. He was joined at the event -- which was taking place in the heart of territory controlled by El Salvador's most powerful drug transport group, the Perrones -- by the...

'Chepe Luna,' the Police and the Art of Escape

'Chepe Luna,' the Police and the Art of Escape

The United States -- which through its antinarcotics, judicial and police attaches was very familiar with the routes used for smuggling, and especially those used for people trafficking and understood that those traffickers are often one and the same -- greeted the new government of Elias Antonio...

Barrio 18 Leader 'Viejo Lin' on El Salvador Gang Truce

Barrio 18 Leader 'Viejo Lin' on El Salvador Gang Truce

Barrio 18 leader Carlos Lechuga Mojica, alias "El Viejo Lin," is one of the most prominent spokesmen for El Salvador's gang truce. InSight Crime co-director Steven Dudley spoke with Mojica in Cojutepeque prison in October 2012 about how the maras view the controversial peace process, which has...

The Reality of the FARC Peace Talks in Havana

The Reality of the FARC Peace Talks in Havana

If we are to believe the Colombian government, the question is not if, but rather when, an end to 50 years of civil conflict will be reached. Yet the promise of President Juan Manuel Santos that peace can be achieved before the end of 2014 is simply...

The FARC 1964-2002: From Ragged Rebellion to Military Machine

The FARC 1964-2002: From Ragged Rebellion to Military Machine

On May 27, 1964 up to one thousand Colombian soldiers, backed by fighter planes and helicopters, launched an assault against less than fifty guerrillas in the tiny community of Marquetalia. The aim of the operation was to stamp out once and for all the communist threat in...

Criminalization of FARC Elements Inevitable

Criminalization of FARC Elements Inevitable

While there is no doubt that the FARC have only a tenuous control over some of their more remote fronts, there is no evidence of any overt dissident faction within the movement at the moment.

The FARC 2002-Present: Decapitation and Rebirth

The FARC 2002-Present: Decapitation and Rebirth

In August 2002, the guerrillas of the Revolutionary Armed Forces of Colombia (FARC) greeted Colombia's new president with a mortar attack that killed 14 people during his inauguration. The attack was intended as a warning to the fiercely anti-FARC newcomer. But it became the opening salvo of...