Fuel theft spreads in Mexico despite government crackdown

The fraudulent fuel market in Mexico represents one of the biggest challenges for the country, affecting the development energy sector and financing organized crime. The theft of gasoline or diesel—and also liquefied petroleum gas—an activity known in Mexico as "huachicol" (usually by drilling into oil and gas pipelines, but also by stealing from tanker cars), has been joined by the growing business of "fiscal huachicol": the illegal importation of fuel with the complicity of corrupt customs networks. In the last decade, the overall problem of huachicol has skyrocketed, and although there has been some decline in the figures, the measures taken by the authorities have not been able to prevent the renewed momentum of this illegal activity.

Recent years have seen a new record in the scale of huachichol (sometimes reservation word is reservation for stolen fuel and huachicoleo is used for the illegal activity). Pemex, the national oil company, estimates that in 2024 it lost 17,000 barrels of fuel per day due to illegal tapping, an increase of 10.4% compared to 2023, when it lost 15,400 barrels per day, with an estimated cost in both years exceeding 20 billion pesos (about $1.115 billion), according to the company's latest annual report [on page 197]. data suggest that in 2025 the figures for 2024 will have been exceeded, as they had already been practically reached in September. In the last decade, huachicol has cost the Mexican state more than 300 billion pesos (about $17 billion at the current exchange rate).

The problem has been around for a long time, known as a local crime before becoming a structural challenge with profound economic, social, and security implications. It began with sporadic illegal drilling, carried out in local operations for personal consumption or small informal sales. However, rising oil prices and lax oversight of the business facilitated the spread of the crime. This loss of revenue seriously harms Pemex, one of the most indebted oil companies in the world.

Starting in 2010, fuel theft became an source of financing for organized crime groups, which systematized extraction, transportation, and distribution networks, scaling up from small communities in Puebla to a national level. States such as Guanajuato, Veracruz, and especially Hidalgo became hotspots for this activity. Over the last decade, the phenomenon has gone through three stages: boom, containment, and diversification of crime.

Evolution of the problem

The boom phase began in 2013, coinciding with the start of Enrique Peña Nieto's six-year term, when the energy liberalization that broke Pemex's monopoly in the sector was approved. Although this liberalization subsequently saw little development to the obstacles put in place during the following presidency (the six-year term of Andrés Manuel López Obrador), it initially forced Pemex to quantify the problem, and the company began to measure the issue illegal tapping that it detected. During this period, there was rapid growth in clandestine fuel tapping, driven by institutional weakness, corruption, and the growing involvement of organized crime. The issue illegal perforations discovered rose from 2,600 in 2013 to almost 15,000 in 2018, reaching an estimated loss of 50 billion pesos in the year when oil prices were at their highest.

This was followed by a period of restraint, just after the tragedy in Tlahuelilpan in January 2019, in the state of Hidalgo, when an explosion in a Pemex pipeline killed 91 people and highlighted the seriousness of the problem. In López Obrador's newly inaugurated six-year term, the federal government took the matter more seriously and implemented the Joint Plan to Combat Fuel Theft, which involved closing some pipelines, protecting others through the deployment of the Armed Forces, and replacing some infrastructure by transporting fuel by land. These measures helped to reverse the trend and reduce theft to 4,100 barrels per day in 2021. However, the strategy had high logistical costs and caused temporary oil shortages in several states.

However, since 2022, the problem has been on the rise again. On the one hand, since the middle of López Obrador's term, there has been a new increase in illegal tapping: in 2022 there were 13,946 cases, 14,890 in 2023, and 10,396 in 2024, although the data depending on the source and only takes into account detected perforations (some estimates suggest that, including smaller taps that Pemex is unaware of, the issue have reached 22,000 in 2024). This includes fuel theft from tanker trucks and the more recent phenomenon of theft from trains, which have replaced routes previously covered by pipelines that are now closed.

‘Fiscal fuel theft’

Alongside this, the term "fiscal huachicol" has emerged, referring to the illegal importation of fuel without paying taxes. This modality manipulating customs permits and using false documents to evade taxes, allowing gasoline of illicit origin to enter and be sold on the formal market. The major Issue 'fiscal huachicol' was uncovered in 2025: in March, two admiral brothers, nephews of the head of the administrative office during López Obrador's six-year term, were arrested for setting up a fraudulent fuel network from the United States, with profits of at least $150 million between 2023 and 2025; In December, the director research was dismissed. Investigations suggest that between 2021 and 2022, there was potential damage to the Treasury of 120 billion pesos (more than $6 billion).

President Claudia Sheinbaum has promoted a reform of the Customs Law to make illicit operations more difficult. At the same time, the Federal Law has been reformed to classify the crime as subject , and the Energy Financial Intelligence Unit has been created to track illicit flows more accurately. The private sector has also taken steps to adopt tools for digital tracking and create a blockchain to control inventories and reduce diversions. However, high levels of corruption could limit the effectiveness of these measures.

In the social sphere, fuel theft has generated informal markets and economies in rural communities, where the lack of employment families to participate in this illegal extraction and sale. In terms of security, this crime is core topic the financing of organized crime and large cartels that generate terror and spread their territorial influence with violence, supported by corruption. Their presence manager weaken local authority and gradually erodes civic trust, reinforcing the concentration of power and corrupt systems that are highly dependent and difficult to break.