THE SHORTAGE OF FUELS IN MEXICO – MANAGING CRISIS AND COMPLIANCE
On 1 December 2018, Andres Manuel Lopez Obrador (popularly known as ‘AMLO’) took office as president of Mexico after being defeated in two previous presidential campaigns. One of AMLO’s principal campaign promises was that he would end the carcinogenic corruption in Mexico, generated by the previous governments.
During several years, criminal gangs popularly known as ‘Huachicoleros’ (and the stolen product known as ‘Huachicol’) have long targeted the pipelines that run through Mexico transporting refined products, from refineries to distribution points. The Huachicoleros tap into a pipeline, siphon gasoline and diesel and resell it, all under the blind eye of allegedly corrupt officials of Pemex, the state-run energy company, local authorities and security agencies.
The Huachicoleros apparently receive sensitive information from Pemex’s officials that help the Huachicoleros tap the pipeline, and allegedly corrupt officials omit to report any technical sign of an illegal tap, such as a decrease of pressure in the pipeline or differences between the product sent into the pipeline and product received at the distribution centre. Local authorities and the securities agencies allegedly provide protection to the Huachicoleros.
This network of allegedly corrupt officials and Huachicoleros has generated an illegal market of fuels that authorities estimate costs Pemex, and thus Mexico, more than US$3bn every year. To fight these criminal bands, in the final days of December 2018, AMLO ordered a shutdown of Pemex’s pipelines that feed the country with refined fuels. This shutdown caused a shortage of fuels in several areas of Mexico for as long as for three weeks. Even today, the situation has not been resolved in certain areas.
Apr-Jun 2019 Issue