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Tragedy & Port bottlenecks. The Mexican fuel theft crisis

Peter Stewart, PortandTerminal.com, January 11, 2019

Veracruz, Mexico (January 22, 2019) – A fireball ignited and killed 85 people, desperate for fuel, who were collecting gasoline from a pipeline that had been illegally tapped last weekend.

Meanwhile, at least 60 oil tankers are stranded at Mexico’s main ports, unable to offload their fuel. The vessels are stuck in ports because port fuel storage facilities are full and can not accept any more deliveries. One of the ships has been waiting to offload its cargo for 41 days.

Mexico is in the midst of a fuel theft crisis.

Why is this happening?

Fuel theft is a major problem in Mexico that the government is trying to combat.

Thieves tap into pipelines and are currently siphoning off the equivalent of around one-fifth of total national gasoline consumption, about 150,000 barrels per day (bpd) according to Reuters calculations based on official data.

Criminal gangs have stolen tanker trucks carrying diesel and gasoline. All of this has been taking place in Mexico an oil-producing country, costing the government billions of dollars.

As part of its strategy to fight fuel theft, the Mexican government is making greater use of tanker trucks to transport fuel rather than pipelines which are easier targets for fuel theft.

The pipeline between Tuxpan and Mexico City for example is currently closed because, according to Mexican President López Obrador, it has been damaged by repeated acts of “sabotage”.

With pipelines closed, terminals are unable to shift oil from the ports inland to where it is needed quickly enough.

Bottlenecks at Mexico’s main Gulf coast and Pacific coast ports have increased this week, and now prevent almost 10 million barrels of gasoline and diesel from discharging on schedule, further complicating distribution.

Which ports are affected?

According to ship tracking website Marine Traffic, the tankers are stuck at the ports of Tuxpan, Veracruz, Altamira, Acapulco, Coatzacoalcos, Lázaro Cárdenas, Manzanillo, Salina Cruz, Tampico, Mazatlán, Guaymas, La Paz, Ensenada and Campeche.

Two-thirds of the stranded tankers are located at just two Gulf of Mexico ports —  Veracruz, where 31 are waiting to unload, and Tuxpan, where there are nine.

What’s the outlook?

At a recent press conference, the Mexican president pledged that the situation at Mexico’s ports and gas stations would return to normal soon.

The congestion problem at the ports though is set to get worse, with a Singaporean tanker expected to arrive from Texas and a Greek ship expected from Louisiana. More tankers with deliveries are on their way.

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