Deadly Gangs of Oil Thieves Expand Their Business Model

Systematic “Petro-Plunder,” as we’ve come to call it, eats into Mexico’s energy sector.

In the early hours of Wednesday, September 12, a massive leak of highly flammable liquefied petroleum gas (LPG) escaped into the quiet air of Villa Frontera, a suburb on the northern edge of Mexico’s fourth largest city, Puebla. Authorities evacuated thousands of local residents. The apparent cause of the leak was a botched pipeline tap by one of Mexico’s notorious gangs of oil thieves, or huachicoleros (pronounced “watchy-coh-leh-rohs”), who are terrorizing communities, draining national coffers, and threatening the viability of Mexico’s already debilitated energy sector.

The gas leak in Villa Frontera is the latest sign that the huachicoleros are diversifying their activities, having discovered a lucrative new niche to exploit: the theft of LPG. The number of gas line taps registered by authorities nationwide increased from five in 2012 to 61 in 2017. This year is set to be another bumper year, with 36 new taps discovered in the first five months.

The theft of LPG — which includes propane and butane — and its illegal distribution to Mexican households is generating estimated losses of 1.1 billion pesos ($58 million) per month, as well as prompting gas companies to stop distributing along certain routes, reports the business magazine, Manufactura. Most of the costs are being borne by Mexico’s state-owned oil giant, Pemex, which is already buckling under the combined weight of shrinking output, rising losses, and growing debt…

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