Gas stations in Mexico run out of gas as government cracks down on fuel theft

MEXICO CITY - One of the world's biggest oil producers is facing a man-made crisis: Its gas stations are running out of gas.

There are mile-long lines at filling stations across central Mexico. In some states, public transportation has been halted. President Andrés Manuel López Obrador, facing his first major challenge, has urged the country not to panic.

But it was López Obrador's war on fuel trafficking that led to the current crisis - a fight against organized crime and corruption that has already proved complicated.

For years, Mexico has lost billions of dollars to fuel theft. Cartels hacked into pipelines each night, and corrupt employees of the country's national oil company, Pemex, helped siphon away even more fuel from Pemex installations. Last year, Mexico lost an average of 60,000 barrels of fuel to theft per day, according to Etellekt, a risk consultancy that studies the phenomenon. The thieves earned their own nickname, born from Mexican slang: huachicoleros.

As López Obrador began his crackdown on fuel theft this week, he directed the government to shift the transportation of petroleum away from pipelines, an attempt to protect the many gallons stolen by men using hammers and buckets. Instead, the government began using trucks and rail cars to transport fuel, often escorted by soldiers and police. That distribution method has proved to be slower and less reliable.

"There is enough gasoline in the country," López Obrador saidto reassure the country at a Wednesday news conference. "But we cannot use the pipelines because there are networks that were created to steal gasoline, alternate networks."

As the government tried to calm the nation, the fuel shortage appeared to be worsening. On television programs and in newspapers, it was a problem that easily eclipsed President Trump's demand for a wall on Mexico's northern border.

In the state of Guanajuato, the Associated Press reported 84 percent of gas stations were closed. In the state of Michoacan, some public buses have stopped running. Milenio, one of the country's biggest newspapers, ran a banner headline on its site on Wednesday: "Crisis caused by oil theft." The private sector has begun to feel the impact.

"We have already begun to have some concerns, calls, anguish, especially from companies in the [states of] Querétaro, Guanajuato and Jalisco, which are having supply problems and where production plants are being affected," said Juan Pablo Castañón, the head of Mexico's largest chamber of commerce, in an interview with Milenio.

Still, security experts have praised López Obrador's willingness to take on fuel theft, a phenomenon that was largely ignored under previous administrations, as the problem spiraled out of control.

"We have a network of pipelines that are vulnerable to organized crime and by the corruption in the government. Previous administrations tolerated this for years," said Ruben Salazar, the director of Etellekt, the consultancy, in an interview. Salazar called López Obrador's crackdown "an achievement" but said the administration has done a poor job of communicating its plans, failing to articulate a long-term vision for defeating the powerful fuel theft cartels.

He added one of the reasons for the gasoline shortage is probably because some gas stations had previously been buying stolen fuel on the black market, which has been mostly blocked under the current crackdown.

Mexico will have to decide whether to shift gasoline distribution away from its vulnerable pipelines more permanently, perhaps by purchasing a new fleet of fuel trucks. On Tuesday, López Obrador appeared to suggest the pipelines would indeed remain closed for some time.

"It would be easy to open the pipelines and say that the situation is normalized but it would be to knowingly maintain the theft, to tolerate the theft, and that we will not do," he said at a news conference. "We will resist all the pressures."

The other major question regarding López Obrador's crackdown on fuel theft is how criminal groups will respond. Pemex estimates $7.4 billion in fuel has been stolen since 2016, and cartels are unlikely to accept such a massive loss in revenue without responding. In recent years, some of the country's most dangerous drug cartels have become increasingly involved in fuel theft.

"We need to worry about the safety of the president," Salazar said. "This is a business with a lot of interests, and they aren't going to take this crackdown lightly."

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