Mexico making progress against fuel theft, president says

Mexican President Andres Manuel Lopez Obrador said Thursday that while much work remained to be done, his administration’s efforts to fight fuel theft were already saving state-owned Petroleos Mexicanos (Pemex) 50 billion pesos (about $2.6 billion).

“Fuel theft has not been completely eradicated. There are still some clandestine taps and we’re continuing the operation. It’s going to continue. We’re not going to get distracted and let down our guard. We’re going to stick to the whole plan,” the president said in a press conference at the National Palace.

When the president took office on Dec. 1, he launched a fight against fuel theft, a crime that has plagued Pemex for years and produced losses of 65 billion pesos ($3.4 billion) in 2018 alone.

On Thursday, the government marked the two-month anniversary of the start of the operation targeting fuel theft, an effort that led to tighter pipeline security and changed the way Pemex delivers fuel to service stations.

The government shut down pipelines and delivered fuel using tanker trucks, a change in operations that led to shortages in many states and caused panic buying by motorists.

“There was resistance and sabotage, but there is now fuel in all the country. We had a tough time,” Lopez Obrador, leader of the leftist National Regenertion Movement (Morena), said.

The president thanked Mexicans for behaving “well” and supporting the plan, which is producing results.

“We managed to reduce fuel theft considerably. If we keep going the way we are, we can save nearly 50 billion pesos ($2.6 billion). Money that belongs to the people and will return to the people,” Lopez Obrador said.

Pemex CEO Octavio Romero, for his part, said fuel theft dropped from an average of 56,000 barrels per day (bpd) in 2018 to about 8,000 bpd this month.

The situation is “nearly back to normal” in the majority of states where shortages occurred, the Pemex chief said.

Defense Secretary Luis Cresencio Sandoval said the more than 8,000 security forces members deployed to protect pipelines and roads found 1,260 illegal fuel taps, seized 689 vehicles and confiscated nearly 2,000 containers.

Some 4,000 marines are protecting pipelines, Navy Secretary Jose Rafael Ojeda said.

Since the operation was launched, 137,000 people have been stopped and questioned, and five boats and 23,000 vehicles have been inspected, the navy secretary said.

Security and Citizens Protection Secretary Alfonso Durazo said the operations conducted by the security forces have resulted in 175 arrests, the seizure of 1,411 vehicles and the confiscation of millions of liters of stolen fuel.

Authorities froze the accounts of 226 people, taking control of 925 million pesos ($48.2 million) and more than 738,000 dollars in cash, Finance and Public Credit Secretariat Financial Intelligence Unit chief Santiago Nieto said.

Last Friday, the government unveiled an aid package totaling 107 billion pesos ($5.5 billion) to bolster Pemex, which is struggling with sky-high debt and has seen its output plummet over the past 15 years.

“We’ll be presenting what will be the first injection of funds to support Pemex,” Lopez Obrador said following the announcement. “If more is needed, we’ll allocate more funds.”

Pemex, whose debt totals around $106 billion, is in a precarious situation due to, among other reasons, a steep drop in production to an average of just 1.71 million bpd in December, down from 3.38 million bpd in 2004.

The company also suffers from aging infrastructure, while budget cuts by the previous administration slashed funds needed for oil exploration.