Mexico Gasoline Import Weakness Persists

Mexico Gasoline Import Weakness Persists image

Mexico Gasoline Import Weakness Persists

02/04/2019 | Author: Amir Richani

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In December, Mexican President Andres Manuel Lopez Obrador, popularly known as AMLO, launched a plan to fight fuel theft across Mexico in an effort to offset the billions of dollars lost to the illicit activity during the previous administration. 

As part of the plan, AMLO strengthened security measures around the nation’s energy infrastructure and started using trucks to deliver fuel rather than by pipelines. Trucking, however, is significantly less efficient. This eventually led to port congestion at terminals such as Tuxpan and Parajitos as distribution channels backed up.

Tuxpan - Coatzacoalcos

Port congestion in early January led to lower Mexican imports of gasoline. The Wall Street Journal published this article on the matter, highlighting lower imports via our ClipperData. AMLO responded, saying our data were incorrect and that Mexico was importing more gasoline. 

However, a few weeks later, Mexican newspaper El Financiero reported that the Energy Ministry acknowledged that gasoline imports decreased in early January, validating our numbers. 

With January now complete, we can see that gasoline imports remained lower for the duration of the month.  Gasoline imports averaged 383,000 bpd, 25 percent below the 2018 average and 28 percent below the prior month. For their part, middle distillates imports, which includes diesel and gasoil, averaged 242,000 bpd in January, 13 percent lower than the 2018 average. In 2018, both imports combined for an average of 788,000 bpd, while in January they were 625,000 bpd.

Mexico imports

After launching AMLO’s plan, the government announced that it has significantly reduced fuel theft, and that it hopes to save the country as much as $2.1 billion annually. In addition, the severe fuel shortages caused by the slower distribution mechanisms have been largely brought under control due to the hiring of private trucks and the occasional pipeline reopening. 

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Despite this, Pemex continues to grapple with siphoning, with the 193-mile-long Tuxpan-Azcapotzalco pipeline among the most affected. 

Fuel theft is a complex problem in Mexico, spurred on by corruption within both the government and Pemex. So far, AMLO’s administration is investigating hundreds of people linked to fuel theft across Mexico, including former Pemex officials. Ongoing congestion at ports and lower waterborne imports will likely persist as long as the government undertakes an all-out war on fuel theft.

Mexico imports by grade type ClipperData


About The Author

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Amir Richani is a geopolitical analyst focused on Latin America. His research focus is on political, economic and social developments that could have an impact on global flows. Amir holds a BA in political studies from the American University of Beirut. He was the lead analyst at Eqlim prior to joining ClipperData.