Understanding Fuel Theft (Huachicol) in Mexico
Fuel theft, known colloquially as “huachicol,” refers to the illegal importation of fuel through false declarations. This issue has been labeled as one of Mexico’s most complex criminal phenomena, involving high-ranking naval officials, public servants, businesspeople, customs agents, and organized crime.
The Extent of the Financial Damage
While most figures are unofficial, estimates of the economic damage caused by fuel theft range from 500 billion to 800 billion pesos between 2018 and 2024, according to non-governmental organizations. Recently, official sources have highlighted these figures.
Sheinbaum’s Impactful Actions Against Fuel Theft
Under Claudia Sheinbaum’s first year in office, significant strides have been made against fuel theft. The Secretariat of Security and Citizen Protection, the Navy, the Federal Attorney General’s Office, Pemex, and Customs have achieved substantial seizures and important arrests.
- In March 2023, a historic seizure of 10 million liters of diesel was made in Tampico, Tamaulipas, originating from Texas—the largest in Mexican history.
- Also in March, 15 million liters were confiscated in Coahuila using railroad tank cars.
- In May, 3 million liters were seized in Tabasco, and clandestine refineries with 1 million liters were discovered in Veracruz to evade taxes like the Special Products and Services Tax (IEPS), Value Added Tax (VAT), and tariffs.
These actions have surpassed the volume achieved during the Lopez Obrador administration.
Official Figures on Fuel Theft
Recently, officials from the Federal Tax Prosecutor’s Office and the Ministry of Finance and Public Credit have cited figures related to fuel theft.
- During her testimony before lawmakers, the Federal Tax Prosecutor, Grisel Galeano Garcia, reported that the accumulated damage from fuel theft has reached 600 billion pesos.
- More than 16,000 complaints and 102 active lawsuits have been filed with the Federal Attorney General’s Office for a total of 16 billion pesos.
- Carlos Lerma Cotera, the Undersecretary of Revenue at the Ministry of Finance, highlighted a yearly increase in customs revenue of over 200 billion pesos, part of which comes from combating fuel theft.
Both officials emphasized that customs agents have not faced legal proceedings, unlike public officials involved.
Lerma urged lawmakers to approve proposed amendments to the Federal Fiscal Code and Customs Law, including measures like preventive detention for false invoices and stricter penalties to enhance litigation efficiency and recover resources.
In March 2021, the then head of the Servicio de Administración Tributaria (SAT), Raquel Buenrostro, identified fuel theft as Mexico’s major problem. She reported a 23 billion pesos drop in IEPS revenue from combustibles in the first quarter of that year, due to both traditional contraband and fuel theft.
Fuel theft, a criminal corruption phenomenon developed over many years, poses one of the most challenging tasks for Claudia Sheinbaum’s government, who has demonstrated her determination to combat it.
Energy Sector Update
In energy sector news, the regulation of the Hydrocarbons Law (among various regulations) published by the Secretariat of Energy, led by Luz Elena González, opens the door for private companies to explore or extract hydrocarbons from Mexico’s subsoil. Although Pemex retains priority, private companies may engage in such activities when the government decides.
