Gasoline theft becomes major criminal enterprise in Mexico

Pemex’s network of pipelines is an easy target for gangs who puncture the ducts and siphon the fuel to sell. (Esdelval/iStock) Pemex’s network of pipelines is an easy target for gangs who puncture the ducts and siphon the fuel to sell. (Esdelval/iStock)  

The air in Progreso de Juárez is thick with the pungent odor of gasoline. It is not difficult to find the origin; just next to one of the roads that enters this small town is a large, dark spot on a patch of dirt, several feet wide. “Gasoline,” Alejandro explains. He is careful not to be too obvious in pointing out the location of the spot. “This is where they were illegally tapping from an oil duct a short while ago.”

Alejandro, a resident of the region, does not want his real name to be used in this article. He fears for his safety if it were, and for good reason. Just about 100 feet further up the road, three teenagers, bicycle in hand, take a close look at our car.

“These kids are halcones, lookouts,” Alejandro says. “They keep an eye out for anybody they don’t know who enters town. They’re suspicious, it’s dangerous to linger here too long.” After just a few minutes of driving around town we turn back; we are being watched.

Progreso de Juárez is part of Acatzingo, a municipality of 55,000 people in the central Mexican state of Puebla, some 100 miles west of Mexico City. It is part of the so-called Triángulo Rojo (the “Red Triangle”), a region of small towns surrounded by long stretches of flat farmland. Farming, however, is not what provides its inhabitants with income.

Farming is not what provides the inhabitants of "The Red Triangle" with income.

Directly underneath the town runs one of the most important oil ducts of Pemex, Mexico’s national oil company. That pipeline, which runs from Minatlán in neighboring Veracruz state to Mexico City, according to locals, provides the income for some 90 percent of the population of the village, through clandestine tapping. Progreso is not alone; most towns and villages in the area have become hotbeds of what has in recent years become one of Mexico’s most profitable criminal ventures: gasoline theft.

With a production of more than two million barrels of crude oil per day, Mexico ranks 12th among the world’s petrol powers. Its oil industry is monopolized by state-controlled Pemex, which was created after the country nationalized the oil industry in 1938. It has since been a symbol of Mexican sovereignty and independence.

Almost eight decades after its creation, however, Pemex has lost much of its former glory. Plagued by a lack of investment and inefficiency, Mexican oil production has dropped steadily since reaching its peak of 3.38 million barrels per day in 2004. And while production drops, oil theft spikes. No less than 27,000 barrels of oil are stolen every day, according to Pemex, and the number of clandestine tappings of gasoline pipelines has increased a staggering 915 percent between 2011 and 2015.

Organized crime is the principal culprit. Across the country, Pemex’s vast network of oil pipelines is an easy target for gangs who puncture the ducts and siphon away up to $90,000 in a single tapping. With approximately 10 percent of Mexico’s annual state revenue deriving from oil production, the losses are enormous. According to a recent investigation by the news website Animal Político, almost four billion gallons of fuel have been stolen since 2009, worth almost $8 billion.

Almost four billion gallons of fuel have been stolen since 2009, worth almost $8 billion.

Fuel theft has become an especially embarrassing problem for the Mexican government now that it is in the process of a historical opening of the petrol industry. In 2013, the administration of president Enrique Peña Nieto began a gradual opening of the energy sector to private investment in an attempt to reverse declining production. Despite moderate success in auctioning off oil fields to risk-sharing contracts with foreign investors, energy reform has been controversial, especially after a sudden spike in gas prices earlier this year caused riots and protests across the country.

The thieves know exactly where to find the product they need, Artemio Jameson, a labor activist working for Pemex’s perforation division in the northern Mexican state of Tamaulipas, told America in January. “The gangs bribe people in Pemex who know which kind of gasoline runs through which duct,” he said. “It’s an open secret.”

The fuel thieves puncture the pipelines, stop the leak with a valve and siphon the product to tank trucks. The stolen gasoline is then transported to distribution centers, and then sold in local markets. Stolen gasoline is significantly cheaper; whereas Pemex charges between $3.40 and $3.80 for a gallon, depending on the kind of fuel, the clandestine product costs a mere $2.40 per gallon.

Such low prices come with a risk, however, Alejandro explains. “There’s always some dirt in the [gasoline], because they dig holes to siphon the stuff, which can damage the fuel pumps in an engine,” he says.

Pemex’s vast network of oil ducts falls victim to theft across the country, but no region has come to symbolize the practice more in recent years than the Red Triangle. Entire communities here have come to base their economy on tapping pipelines. The stolen product is colloquially known as huachicol, the thieves as huachicoleros, the business of stealing the product huachicoleo.

“Stealing oil has become ingrained in both the local economy and the local culture,” Alejandro explained. “It is now considered a normal part of everyday life here.”

The crime has even become a part of regional culture. A local singer, Tamara Alcantará, recently composed a cheerful cumbia song in honor of gasoline theft, “El Huachicoler,”in which she narrates the transformation of a farming community to a community of oil thieves. And in recent months, the photo of a baby Jesus holding a siphoning hose and a jerry can has circulated on social media.

In recent months, the photo of a baby Jesus holding a siphoning hose and a jerry can has circulated on social media.

But as gasoline theft has spiked, so has violence. Huachicoleo has become so profitable that organized crime has moved in and industrialized the business. Barely two decades ago, stealing fuel was mostly a family affair with small groups of people siphoning the product into jerry cans. Now entire caravans of tank wagons are used to tap massive amounts of petrol from the ducts.

“The groups of huachicoleros have increased their capabilities in recent years,” wrote security expert Alejandro Hope in Mexico City newspaper El Universal. “They have lookouts who sound the alert when there are law enforcement operations. They have security details that carry heavy weapons.”

The gangs regularly clash with law enforcement in the Red Triangle. In May, 10 people died when a group of huachicoleros was cornered into a firefight with soldiers near a police station in Palmar de Bravo, not far from Progreso. The authorities have reacted by sending soldiers and federal police to the region. When I visited Palmar de Bravo, helicopters of the armed forces circled over small market towns, searching for huachicoleros.

At the police station in Palmar where May’s shootout took place, police officers monitored traffic. They seemed on edge and not very willing to talk. “Look, these bastards are killing our guys,” one police officer who identified himself as Castillo told me sharply. “They’re far more violent than they were before. We need to be vigilant, they’re a huge problem.”

Federal lawmakers agree. Congress in Mexico City is currently debating a new anti-fuel theft law that would punish thieves with up to 30 years in prison. But despite such severe punishment and increasing police and military presence in areas, few locals in the Red Triangle believe it will end the huachicoleo any time soon.

According to Alejandro, most of the thieves do not believe they are criminals. “They grew up with the idea of the nationalization of the oil industry, that oil belongs to all Mexicans,” he said. “Now that the government is opening the oil sector to private investment, they think that it’s actually the government stealing from Mexicans. They think they’re the good guys.”

Margi Sirovatka
1 month ago

Thank you to Mr. Hootsen for a most enlightening article. Nationalization of the industry has had its challenges over the decades...this is a new one for struggling Mexico.

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