Mexico’s Drug War Leads to a Legal Battle: PEMEX’s Stolen Fuel

Over the last few years Mexico’s drug cartel’s have moved into different markets, one of those being selling stolen fuel which most often is taken from pipelines or trucks from Mexico’s national oil company, PEMEX. PEMEX has a special role in the Mexican economy, traditionally being one of the greatest sources of revenue for the Mexican state, PEMEX allowed Mexico to fund many of its public projects and is still a major source of revenue for Mexico’s public sector. A recent lawsuit in Texas sought to close off an avenue for selling stolen Mexican oil and fuel products. In the Burgos field in Northern Mexico alone, PEMEX claims that upwards of 40% of gasoline concentrate have been stolen by Mexican organised crime syndicates since 2006 and the lawsuit currently being discussed in the Texas courts seeks to eliminate any purchase of stolen fuel products from Mexico when there is clear evidence that those products have likely been taken from illegitimate sources.

The difficulty in the case comes from two issues, one proving that the products were known to be stolen and even distributed by cartels or organised crime in Mexico, and the second applying charges to the companies as knowledge and acceptance through purchase of illegal fuel sales from Mexico could be applied as criminal charges in Texas and the US towards US companies directly. As with all cases, applying criminal charges on large companies are as effective as being able to prove which corporate officers committed the acts and had knowledge and intention to purchase fuel they knew came from illegal activities in Mexico. With PEMEX’s close relationship with the Mexican state and the theft of fuel across the US border becoming a diplomatic issue as well as a legal one, it is likely that the court will have to decide what actions to take with the diplomatic issue in mind. Mexico often claims to have the problems with its cartels amplified due to the large demand in the US for narcotics, and now fuel, and the importation of weapons from the US that adds to the violence in Mexico’s drug war. There is a good chance that the decision in the Texas court may determine the foreign policy approach towards stolen fuel purchases as it becomes an increasingly difficult problem in Mexico and more fuel is sold illegally to its destination market, the United States.

Stolen fuel products in Mexico are becoming a serious issue, not simply for issues of public revenue for the Mexican state, but for safety reasons as well. Many PEMEX workers have been assaulted and killed, trucks hijacked and oil pipelines have been unsafely hacked causing some minor incidences. In some cases some major explosions had resulted in the deaths of innocent citizens who live near the pipelines when unsafe tapping of the pipelines caught fire in the process of illegally siphoning fuel. The market in illegal fuel has become so prominent that many cartels have constructed their own distribution systems, even making their own covert pipelines to sell to US companies who have been named in the recent lawsuit. The end result of this lawsuit might not change much of the activities in Mexico, but on the US side of the border it might dampen some of the demand for stolen fuel. Most likely this issue has just begun to see some attention in the media in the US and will certainly become a major issue of diplomacy in the near future.