Mexico fuel disruptions spread to eight states

Mexico's holiday season fuel shortages expanded over the weekend, with eight central and western states reporting problems caused by the federal government switching from pipelines to trucks in an attempt to reduce fuel theft.

Fuel shortages deepened in the states as Queretaro, Guanajuato, Jalisco, Michoacan, Estado de Mexico, Hidalgo, Puebla and Nuevo Leon over the weekend. Drivers reported waiting up to three hours for fuel, taxi services closed down and police patrols were cut in half to save fuel. Trash collection has also been reduced in some states.

Stations run by private brands including Shell, BP and local retailer Oxxo are suffering from fuel shortage along side those of state-owned Pemex.

Shortly before Christmas the administration of President Andres Manuel Lopez Obrado launched a plan to fight fuel theft that included deploying 4,000 soldiers to guard pipelines and terminals, and shutting down some theft-prone pipelines and shifting to delivery by truck. Fuel theft cost the country an estimated $3.3bn in 2018 as 58,200 b/d of fuel were stolen, primarily from illegal pipeline taps.

The shift off pipelines and onto trucks led to the massive delays that started around Christmas.

State-run Pemex said over the weekend that it would restart the 8-inch, 23,000 b/d Salamanca-Leon line to service, connecting the 220,000 Salamanca refinery in Guanajuato state to points throughout the region. The pipeline was partially or completely shut-down last week.

Mexico has relatively small fuel storage capacity, with only enough to meet three days' worth of demand, depending on the region. But Pemex said that the problem is the distribution method and that inventories are in the right level.

"We have enough reserves, we are changing how we distribute the product," Lopez Obrador said today in a press conference. "We are avoiding the previous methods in which pipelines were wide open [to thieves]."

Scuffles have been reported between drivers and gas station attendants ordered to limit the servings to 10 liters (2.6 USG) per car. Requests to fill extra containers are denied.

In Leon, Guanajuato, only 22 out of the 192 retail fuel stations were opened yesterday according to a report from the city's government because the lack of fuel supply. The city of Morelia in Michoacan reported that only 15 out of the roughly 100 stations were opened.

In the capital of Guanajuato all stations were closed over the weekend but were to reopen today, mayor Alejandro Navarro Tweeted.

Mexico's central region consumed an average of 242,000 b/d of gasoline in the week ended 14 December, as well as 85,000 b/d of diesel. Drivers in Mexico's western region consumed 152,000 b/d of gasoline and 81,000 b/d of diesel in the same period.