The U.S. has finally recognized the existence of a fuel trafficking network at the Mexico border. President Claudia Sheinbaum calls for cross-border accountability as “huachicoleo” devastates both nations’ economies and environments.

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In a historic move, the United States has publicly recognized,for the first time,the operation of sophisticated fuel trafficking networks on its own soil, linked directly to Mexico’s infamous “huachicoleo.”

Mexican President Claudia Sheinbaum, steadfast in her fight against fuel theft, praised the U.S. acknowledgment and pressed for concrete action from Washington, demanding the prosecution of all involved, regardless of which side of the border they operate on.

“It’s striking because sometimes there are U.S. government officials who believe the entire problem lies in Mexico. And here they themselves acknowledge that refineries in their country are involved. That’s part of the joint investigations that already exist,” Sheinbaum affirmed in her morning conference.

The Mexican treasury lost an estimated 177 billion pesos (over $9 billion) to fuel smuggling in 2024 alone, with tax evasion schemes estimated to represent nearly 30% of the fuel legally sold in the country. Daily, the government fails to collect around 485 million pesos in taxes, mainly IEPS and VAT, due to these criminal practices.

This isn’t merely a matter of “fuel theft” from pipelines. The new face of “fiscal huachicol” involves transnational corporations, customs officials, and merchant marine workers importing untaxed gasoline from the U.S., often disguised as innocuous products, according to explosive revelations by Mexico’s anti-corruption authorities. These well-orchestrated operations siphon away revenue needed for public services and development.

Investigations by left-leaning Mexican media and anti-corruption watchdogs highlight that high-ranking company managers, customs agents, and criminal entrepreneurs are all complicit in the fuel smuggling schemes. It is a business model that benefits not only the cartels but also “white-collar” collaborators both north and south of the border. The stolen or tax-robbed fuel is funneled to “legal” gas stations, while Pemex and other honest importers face unfair competition and social deprivation.

According to U.S. Treasury alerts, fuel theft and crude oil smuggling have become “cash cows” for the Jalisco New Generation Cartel and other transnational criminal organizations, generating billions in illegal revenue that funds further social destabilization in both Mexico and the United States.

The ravages of huachicoleo extend beyond the financial: environmental destruction, spills, and toxic waste from illegal drilling and unregulated fuel imports have poisoned communities and endangered public health in states like Tabasco, further exposing the cost of government indifference and corporate greed. As President Sheinbaum warned, “We will go to the very end” in defense of both national dignity and natural resources.

Sheinbaum outlined the two main forms of huachicol tax: one cloaked in false customs paperwork, the other in fraudulent invoices. She calls for strict tax enforcement and the full transparency of fuel sales chains, demanding that all companies, including those in the U.S., declare their imports honestly and pay what is owed.

💡 Seguramente has escuchado sobre el #Huachicol 🛢️, pero ¿sabes qué es el huachicol fiscal? Aquí te lo explicamos y te platicamos las acciones que 🇺🇸 y 🇲🇽 tomamos para frenarlo. ¡Entérate! pic.twitter.com/eaFU5phn29

— Embajada EU en Mex (@USEmbassyMEX) July 23, 2025

The text reads: You’ve probably heard about #Huachicol, but do you know what fiscal huachicol is? Here we explain it to you and tell you about the actions we are taking to stop it. Find out more!

“If fuel is imported, let them pay the taxes they owe and let us know which gas station it goes to. We’re going to put things in order. Let everything be legal,” she insisted.

Mexico’s demand for U.S. action is clear: joint investigations must now result in actual sanctions—not just against street-level operatives, but against executives and officials in both countries who profit from the looting of public wealth and the suffering of the people.

President Sheinbaum’s administration reaffirms the commitment to dismantle “huachicoleo” networks wherever they operate. Only through transparency, transnational justice, and popular mobilization can Latin America’s working majorities hope to reclaim what has been stolen by corporate and criminal accomplices alike. The daily struggle against neoliberal extraction continues, and Mexico insists that justice knows no borders.

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