Buying stolen gasoline in the central Mexican state of Puebla is easy. Pull off the main highway into a busy parking lot, and the black marketeers are waiting in pickup trucks loaded with jerrycans. They’ll siphon the fuel into your tank—boasting as they do that unlike a lot of the country’s regular gas stations, they don’t cheat customers.
While this illegal curbside commerce has been going on for decades, it has exploded in the past few years and now costs Pemex, Mexico’s state oil company, more than 20 billion pesos ($1.1 billion) a year. The huachicoleros, as the fuel thieves are known in Mexico, dig up pipelines and hijack tanker trucks. These techniques have made Puebla, with its heavy vehicular traffic and extensive pipeline system, a target for organized crime looking to diversify their profit streams. The country’s drug cartels have muscled their way in, with predictable mayhem. Nine people died in a July 2 shootout between rival gangs of robbers in Puebla. And at least 15 people have died in military operations to take out fuel theft rings over the past several months in an area of the state known as the Red Triangle.
The government has started cracking down because it needs to draw foreign capital into the energy sector, where oil output has been sagging because of a combination of underinvestment in exploration and production, aging wells, and deficient infrastructure. The country has a population about five times that of Texas, yet the U.S. state’s fuel pipeline grid is 35 times larger.
Potential investors who already look askance at the steady drip-drip of losses from theft and smuggling are even more likely to be deterred by drug gang violence. “For potential participants in the fuel business, whether they’re importing gasoline and diesel…