Oil And Gas Theft In Mexico Has Reached Crisis Proportions

The state-owned oil company doesn’t have the money to safeguard their pipelines against thieves.

By Alexandra HartMay 1, 2017 1:44 pm

If you stop at a roadside market in Mexico, you might be able to find black market gas along with the typical fruits and vegetables. Fuel theft has long been a problem in the country, but the New York Times reports it has reached crisis levels.

Thieves steal gas by tapping into Pemex pipelines, which belong to the state-owned energy company. They then sell it on the black market in Mexico, Central America and perhaps even the United States. In 2016, Mexican authorities discovered more than 6,800 taps, a 15-fold increase from 2009, and they say more than 1.47 million gallons are stolen a day.

“There’s 5,600 miles of pipelines going through Mexico carrying fuel and oil, and so all of that cannot be monitored,” says Matt Smith, director of commodity research at ClipperData. “[Pemex is] in a situation now where its budget is being slashed 20 percent each year and so it can’t even afford to maintain its own refineries let alone put security out and maintain and keep an eye on these pipelines.”

What you’ll hear in this segment:

– Why local populations support fuel theft

– How fuel theft has grown over the past decade, and who is behind it

– Whether it will hurt global commodity prices


Written by Molly Smith.