Mexico's energy reforms are opening up its oil and gasoline markets to foreign firms. But any companies entering the country will have to deal with the growing risk of fuel theft, as a mounting number of criminal organizations illegally tap pipelines or intercept trucks carrying finished gasoline. Fuel theft has long existed in Mexico, but whereas it was once a crime committed largely by individuals and small, localized groups, over the past decade it has transformed into a hugely profitable business for drug cartels looking for new sources of income.
With the expansion of organized crime into the business, fuel theft has ballooned. Every year since 2007, more illegal taps siphon hydrocarbon products, primarily diesel and gasoline, from the pipeline network of state-owned Petroleos Mexicanos (Pemex). There were an estimated 3,500 illegal taps on Pemex pipelines between January and August 2015, compared with about 2,300 during the same time period last year and with 1,700 in 2013.
This rise is in part attributable to decentralization in the Mexican drug trade. The illicit narcotics industry was once dominated by a few immense cartels that controlled numerous franchises throughout the country, but now a growing number of smaller, independent groups have arisen, each laying claim to a more limited share of the market. This has not only led to fierce and sometimes violent competition for territory but has also pushed crime groups to diversify their sources of revenue. Along with human trafficking, kidnapping and extortion, fuel theft is another source of income for groups operating in a highly competitive environment. It is also highly profitable: According to the Mexican Association of Gas Station Owners, stolen fuel makes up 30 percent of the 200 million liters of gasoline sold each day in Mexico. And at roughly 6 pesos per stolen liter, organized crime grosses 360 million pesos ($21.7 million) daily in stolen fuel.
