Closing Pemex pipelines is an unsustainable strategy for fighting Mexico’s fuel theft crisis, which has cost the government millions. Only by educating the population to not purchase stolen fuel and having zero tolerance for fuel theft may this crime be fought, claimed Oxford Analytica.
Oxford Analytica, an international consulting firm providing strategic analysis of world events based in the United Kingdom argued that fuel shortage in Mexico would generate significant economic losses and overall frustration among the population.
“In the meantime, AMLO has to seek a long-term reduction strategy that encompasses security, anti-corruption measures, and efforts to change the population’s perception towards fuel sales in the black market.”
The firm pointed out that plundering in the energy sector had shown a dramatic increase in the past few years, with fuel theft costs estimated at around USD$7.4 million since 2016.
Oxford Analytica is a geopolitical consulting firm with offices in Oxford, New York, and Paris. It specializes in identifying business opportunities, building commercial brands, and assessing financial risks. Governments, banks, insurance companies, and multinational corporations are among its clients, who are active in energy, mining, and transport sectors.
In another report, the organization had also warned of the massive plundering of fuel in Mexico last year. A document entitled “The elections will delay Mexico’s efforts to stop fuel theft” warned that plundering had skyrocketed due to the Mexican government’s limited actions to stop it. Citing figures from Pemex, Oxford Analytica claimed that 10,363 cases of fuel tapping had been registered in 2017, way above the 6,873 cases of 2016 and the 635 cases from the three previous years.
Around 1.47 million gallons of fuel were stolen in 2017, which is equivalent to between 1% and 2% of the total amount of fuel transported, with an estimated cost of $1.1 million dollars. The report also claimed that the fuel theft increase was due to society’s complicity facing a sudden increase in fuel costs in 2017, when liquid gas prices increased by 40% while gasoline prices increased by between 17% and 25%.
“The increase in fuel prices is perceived as unfair by a majority of Mexicans, resulting in a growing support for fuel sales in the black market.”
The report also shows the involvement of drug cartels in fuel theft. “The most important cartels in Mexico are involved in the illegal fuel trade, focusing on selling stolen fuel in bulk to private companies and service stations. These groups are mainly responsible for escalating corruption, as well as violence against Pemex employees.”
Oxford Analytica noted that violence had increased in regions with important energy facilities such as Salamanca, which registered 1,096 murders in 2017, 70% more than in 2013. “Though the violent competition for control of Mexico’s energy supply was not the only reason for this increase, it was one of the most important factors,” concluded the document.
Source: El Universal
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