14 Jan 19

Mexico fuel price jumps amidst struggling theft control plan

The metropolitan region of Mexico City is facing a gasoline shortage crisis which has drastically increased its price in many areas. 

The crisis has been brought on by the action plan of Mexico President Andrés Manuel López Obrador to combat fuel theft. Criminal groups, known as "huachicoleros", have been illegally tapping pipelines leading up to the region, home to more than 20mn residents.
Led by armed vehicles, Mexico's government has been diverting fuel to tankers on route to Mexico City. Although this is reducing theft, it is a logistically complicated and slow process which is delaying deliveries and creating long lines at gasoline stations, some of which have shut down.
Some Mexican's are criticizing the process, stating the government should find ways to secure the pipeline (some 600km long) instead of using tanker delivery.

In the meantime, the lack of supply has increased the price of gasoline approximately 50%, reaching at least 32 pesos (US$1.67) in some areas compared to an average price of US$1.00 on January 7.  

For now, the government is fully dedicated to fighting against the theft and there has been no sign of changing the strategy. Approximatley 60bn pesos (US$3.14bn) in fuel was stolen last year, according to the president. 

Photo: Mexico President Andrés Manuel López Obrador (source: Shutterstock)
Authored by: Daniel Bland