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 MS13 Moves (Again) to Expand on US East Coast

The MS13 Moves (Again) to Expand on US East Coast

Local police and justice officials are convinced that the Mara Salvatrucha (MS13) has strengthened its presence along the East Coast of the United States. The alarm follows a recent spate of violence -- of the type not seen in a decade -- which included dismembered bodies and...

How the MS13 Tried (and Failed) to Create a Single Gang in the US

How the MS13 Tried (and Failed) to Create a Single Gang in the US

In July 2011, members of the Mara Salvatrucha (MS13) attended a meeting organized in California by a criminal known as "Bad Boy." Among the invitees was José Juan Rodríguez Juárez, known as "Dreamer," who had gone to the meeting hoping to better understand what was beginning to...

The Lucky ‘Kingpin’: How ‘Chepe Diablo’ Has (So Far) Ridiculed Justice

The Lucky ‘Kingpin’: How ‘Chepe Diablo’ Has (So Far) Ridiculed Justice

José Adán Salazar Umaña is the only Salvadoran citizen currently on the US government's Kingpin List. But in his defense, Salazar Umaña claims is he is an honorable businessman who started his career by exchanging money along the borders between Guatemala, El Salvador and Honduras. He does...

Guatemala's Mafia State and the Case of Mauricio López Bonilla

Guatemala's Mafia State and the Case of Mauricio López Bonilla

Former Guatemalan Interior Minister Mauricio López Bonilla -- a decorated war hero and a longtime US ally -- finds himself treading water amidst a flurry of accusations about corruption and his connections to drug traffickers. López Bonilla is not the most well-known suspect in the cases against...

The Prison Dilemma: Latin America’s Incubators of Organized Crime

The Prison Dilemma: Latin America’s Incubators of Organized Crime

The prison system in Latin America and the Caribbean has become a prime incubator for organized crime. This overview -- the first of six reports on prison systems that we produced after a year-long investigation -- traces the origins and maps the consequences of the problem, including...

El Salvador Prisons and the Battle for the MS13’s Soul

El Salvador Prisons and the Battle for the MS13’s Soul

El Salvador's prison system is the headquarters of the country's largest gangs. It is also where one of these gangs, the MS13, is fighting amongst itself for control of the organization.

'MS13 Members Imprisoned in El Salvador Can Direct the Gang in the US'

'MS13 Members Imprisoned in El Salvador Can Direct the Gang in the US'

Special Agent David LeValley headed the criminal division of the Federal Bureau of Investigation's (FBI) Washington office until last November 8. While in office, he witnessed the rise of the MS13, the Barrio 18 (18th Street) and other smaller gangs in the District of Columbia as well...

Reign of the Kaibil: Guatemala’s Prisons Under Byron Lima

Reign of the Kaibil: Guatemala’s Prisons Under Byron Lima

Following Guatemala's long and brutal civil war, members of the military were charged, faced trial and sentenced to jail time. Even some members of a powerful elite unit known as the Kaibil were put behind bars. Among these prisoners, none were more emblematic than Captain Byron Lima...

Colombia's Mirror: War and Drug Trafficking in the Prison System

Colombia's Mirror: War and Drug Trafficking in the Prison System

Colombia's prisons are a reflection of the multiple conflicts that have plagued the country for the last half-century. Paramilitaries, guerrillas and drug trafficking groups have vied for control of the jails where they can continue to manage their operations on the outside. Instead of corralling these forces...

Where Chaos Reigns: Inside the San Pedro Sula Prison

Where Chaos Reigns: Inside the San Pedro Sula Prison

In San Pedro Sula's jailhouse, chaos reigns. The inmates, trapped in their collective misery, battle for control over every inch of their tight quarters. Farm animals and guard dogs roam free and feed off scraps, which can include a human heart. Every day is visitors' day, and...