Mexico's Fuel Sales Increase as AMLO Confronts 'Huachicoleo'

Mexico’s President Andres Manuel Lopez Obrador says sales of fuel by state-owned Mexican Petroleum (Pemex) increased in 7.9 million liters between Jan. 7 and 14, thanks to the frontal strategy adopted by the new government to combat fuel stealing.

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Lopez Obrador said that gas stations that used to buy fuel from illegal sources were forced to stop and acquire it from Pemex as a result of the strategy. At a national level, sales increased from 119.1 to 127 million liters.

In Mexico City alone, the sales tripled from 4.3 to 13.4 million liters in that same period, said Octavio Romero, Pemex’s director. In Jalisco state, sales also increased by 1 million liters.

However, sales in the rest of the country decreased by 2.4 million liters.

Lopez Obrador explained that the increase in sales resulted in scarcity, as now the company is struggling to supply all the fuel that used to be purchased from illegal distributors.

“We’re selling more fuel than before because we’re also supplying what used to belong to the black market. Because they can’t steal what they were stealing anymore, now Pemex is selling more, even though what I’m saying seems incredible,” said the president.

He also informed that the bank accounts of four military officers, in charge of the pipeline's security, were frozen for their alleged collusion in fuel stealing networks and have arrest orders out for them.

Lopez Obrador announced the plan to combat fuel stealing, known as 'huachicoleo,' on Dec. 27, saying that such theft costs the state more than US$3 billion every year.

A week before he made the announcement, security officers began monitoring the state-owned fuel company’s pipelines. In January, AMLO closed them to avoid further stealing from illegal valves, opting instead to transport fuel by road in supervised tanker trucks.

The strategy and collective panic caused shortages in several cities, leaving people facing long queues to get their tanks filled.

Financial Investigations

Mexico’s security secretary Alfonso Durazo informed that the government freezed the banking accounts of 27 private companies and arrested 435 people accused of being involved with fuel stealing.

Thirteen of those companies were Pemex franchises but have no formal registries that can avail for their purchase of fuel, despite reporting incomes for about US$4,390 million in total, said the secretary on press conference Thursday. Other 114 companies are currently under investigation.

The secretary announced the creation of a new police financial division to participate in the general strategy against fuel stealing and address money laundering cases. So far, the Financial Intelligence Unit has been taking care of the investigations.

Durazo also informed that 16 of these companies are under investigation by the Public Ministry and that the accounts of 15 people were also freezed as part of the operation in the territory.