Violence Raises Oil Risk In Mexico

Fuel thieves could prompt foreign companies to rethink investing in the industry

- Amy Stillman

Buying stolen gasoline in the central Mexican state of Puebla is easy. Pull off the main highway into a busy parking lot in San Salvador Huixcolotla, and the blamarketeers are waiting in pickup trucks loaded with jerrycans. They’ll siphon the fuel into your tank— while boasting that, unlike a lot of the country’s regular gas stations, they don’t cheat customers.

While this illegal curbside commerce has been going on for decades, it’s exploded in the past few years and now costs Pemex, Mexico’s state oil company, more than 20 billion pesos ($1.1 billion) a year. The huachicoleros, as the fuel thieves are known, dig up pipelines and hijack tanker trucks. These techniques have made Puebla, with its heavy vehicular traffic and extensive pipeline system, a target for organized crime groups looking to diversify their profit streams. The country’s drug cartels have muscled their way in, with predictable mayhem. Nine people died in a July 2 shootout between rival gangs of huachicoleros in Puebla. And at least 15 people have died in military operations to break up fuel theft rings over the past several months in an area of the state known as the Red Triangle.

The government has started cracking down because it needs to draw foreign capital into the energy sector, where oil output has been sagging because of a combination of under investment in exploration and production, aging wells, and deficient infrastructure. The country has a population about five times that of Texas, yet the U.S. state’s fuel pipeline grid is 35 times larger.