HomeNewsBriefMexico Fuel Theft Remains Lucrative Despite Oil Price Drop
BRIEF

Mexico Fuel Theft Remains Lucrative Despite Oil Price Drop

MEXICO / 15 MAR 2016 BY LUCIA BIRD EN

The cost of oil theft for Mexico's state-owned oil company Pemex continues to increase year on year, suggesting rock-bottom prices have done little to deter oil thieves.

During the recent International Congress on the Prevention of Emerging Crimes (Congreso Internacional sobre Prevención de Delitos Emergentes), representatives from Mexican oil company Petróleos Mexicanos (Pemex) estimated organized crime steals 23,500 barrels of oil per day from its pipelines, representing losses of 21 billion pesos (roughly $1.17 billion), reported Proceso.

As global oil prices have fallen (following their 2014 peak oil prices have dropped over 70 percent), the reported incidence of oil theft in Mexico has continued to increase.

Pemex officials estimated losses due to oil theft during 2014 at 19 billion pesos (roughly $1.2 billion at the time), and the company's most recent approximation suggests 8.5 million barrels are stolen per year -- up from its 2014 estimate of 7.5 million.

Fuel theft has proven a consistent challenge for Mexican officials, with criminal groups such as the Zetas establishing sophisticated and lucrative oil theft rings in recent years.

InSight Crime Analysis

During a discussion on the issue of fuel theft at the International Congress, Pemex representatives struck a positive note, expressing optimism recent legal reforms in Mexico toughening penalties for oil theft would help combat the problem. However, as InSight Crime has previously noted, more severe penalties are unlikely to provide an effective deterrent to fuel smugglers, as chances of being apprehended and prosecuted remain low.

SEE ALSO: Coverage of Oil Theft

Neither does Pemex appear able to tackle the issue itself. The company's ongoing anti-tapping measures are costly -- one such measure, the improvement of its surveillance systems, was projected to cost 2.9 billion pesos ($161 million) across 2015 and 2016. Yet, with the drop in oil prices, Pemex reported its biggest quarterly loss in company history in October 2015, and plans to cut $5.5 billion from to its 2016 budget.

Given previous struggles at reducing the incidence of oil theft, future budget cuts raise serious questions about Pemex's ability to adequately fund anti-tapping strategies moving forward, thereby rendering its pipelines increasingly vulnerable to organized crime.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

COLOMBIA / 29 OCT 2021

The fascination with “narco-culture” has taken over the entertainment and media industries: documentaries, TV shows, movies, podcasts, even a dedicated…

COCAINE / 25 APR 2022

Mexican authorities have arrested a leader of the initially Guerrero-based Los Rojos crime group in the neighboring state of Michoacán,…

HOMICIDES / 19 OCT 2022

Mothers searching for their missing loved ones in Mexico have been murdered, threatened, and ignored, despite government pledges to protect…

About InSight Crime

THE ORGANIZATION

Escaping Barrio 18

27 JAN 2023

Last week, InSight Crime published an investigation charting the story of Desafío, a 28-year-old Barrio 18 gang member who is desperate to escape gang life. But there’s one problem: he’s…

THE ORGANIZATION

Europe Coverage Makes a Splash

20 JAN 2023

Last week, InSight Crime published an analysis of the role of Amsterdam’s Schiphol Airport as an arrival hub for cocaine and methamphetamine from Mexico.  The article was picked up by…

THE ORGANIZATION

World Looks to InSight Crime for Mexico Expertise

13 JAN 2023

Our coverage of the arrest of Chapitos’ co-founder Ovidio Guzmán López in Mexico has received worldwide attention.In the UK, outlets including The Independent and BBC…

THE ORGANIZATION

InSight Crime Shares Expertise with US State Department

16 DEC 2022

Last week, InSight Crime Co-founder Steven Dudley took part in the International Anti-Corruption Conference organized by the US State Department’s Bureau of Democracy, Human Rights, & Labor and…

THE ORGANIZATION

Immediate Response to US-Mexico Marijuana Investigation

9 DEC 2022

InSight Crime’s investigation into how the legalization of marijuana in many US states has changed Mexico’s criminal dynamics made a splash this week appearing on the front page of…