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Argus Analysis: Mexican fuel thieves find new ways

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Fuel thieves in Mexico look to have developed relatively sophisticated methods to steal LPG from trucks, moving beyond the relatively simple techniques needed for gasoline and diesel theft. 

Thieves are building and operating illegal LPG transport trucks that steal the fuel from terminals — and even pipelines — to sell to customers such as small LPG-fuelled public passenger bus services, LPG distribution industry group Amexgas executive president Octavio Perez says. 

Thieves have been known to steal loaded distribution trucks. But there is some evidence that criminals with advanced engineering knowledge are taking LPG directly from pipelines, according to distribution company sources with knowledge of private security surveillance. 

But extracting LPG from a pipeline is much more complicated than taking gasoline or diesel. Thieves would have to carefully monitor the pipeline temperature, use special machinery to tap the pipeline, place valves to prevent too much gas from escaping into the air and later weld the opening shut. The LPG would be passed from the pipeline to a distribution truck through pressurised hoses. 

Unlike gasoline, LPG only remains in its liquid form if stored under pressure, so it cannot be kept in common containers. This indicates that engineers or other skilled professionals are taking part in the theft, Perez says. “So imagine the scenario where we are having an illegal product sold in pirate vehicles in the streets,” Perez says. “Imagine the danger our industry employees are facing.”

Thefts accelerating

The problem is focused in the states of Tlaxcala, Veracruz and Puebla, known as the “red triangle” for fuel theft. When state-owned oil company Pemex closed a gasoline pipeline in the region that was tapped regularly by thieves, they adapted and began to take LPG from another line, Perez says. “What really worries us is the speed at which these thefts are growing,” he says. 

Just 5pc of the LPG market volumes in those three states were stolen last year, but this year thefts have grown to an estimated 15pc of the region’s LPG market, or roughly 2,285 t/month. The thefts are costing Pemex and the industry as a whole more than 40mn pesos/month ($2mn/month) based on wholesale prices just in those three states, Perez says. Based on energy regulator CRE’s reports on average retail prices to final consumers in May of Ps18,320/t, the losses from theft could be closer to Ps41.8mn. 

Mexican authorities say rampant fuel theft costs Pemex about $1.6bn/yr through more than 1,000 pipeline taps every month — including 1,485 in April and more than 10,000 in the whole of 2017. Most of the thefts are of gasoline or diesel, but officials say LPG is also among those taps. Perez says the problem in LPG is growing so quickly that he expects other areas will be affected soon.

This article originally appeared in Argus LPG World. For more information click here

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