Mexico City fuel supply improves on pipeline flows

Fuel supply in Mexico City is improving following recent shortages as the Tuxpan-Azcapotzalco pipeline that supplies the city completes more than three days without a shutdown.

"The pipeline has not been affected in 84 hours and so we have been able to send 46mn l of gasoline into the city," Pemex engineer Juan Francisco Barrera said this morning.

Gasoline demand in Mexico City is 25mn l/d (6.6mn USG/d), Barrera said.

Fuel shortages began in late December in central and western Mexico following the government's decision to combat fuel theft by shutting down key pipelines that have been subject to repeated illegal taps and shifting delivery of refined products to tank trucks. Fuel shortages spread to Mexico City last week as the 173,000 b/d, 317 km (197 mile) pipeline between the Tuxpan port and the capital was shut following a series of illegal taps. The pipeline reopened from 11 January but was again shut on 14 January. It has since remained open following increased monitoring by soldiers and planes equipped with night-vision technology.

Military protection of Mexico's refined product pipelines will be a permanent feature of the government's combat against fuel theft, with 10,000 military, navy and police personnel to be deployed, Mexican President Andres Manuel Lopez Obrador said yesterday.

The government also plans to increase monitoring and protection at the Dos Bocas port and the surrounding coastline that is home to some of Mexico's most prolific oil production complexes, Lopez Obrador said this morning.

There has been an increasing incidence of oil equipment theft in the Campeche sound and Tabasco bay amid a lack of security measures and Lopez Obrador suggested this week that falling oil production and export levels could be because of crude theft.

"Construction of a monitoring station within the Dos Bocas port terminal will conclude shortly and then the Navy will be in charge of monitoring the whole bay," he said.

Pemex has imported an average of 764,800 b/d of gasoline so far this month, up by 37pc on December's 559,000 b/d. Private companies combined imported 49,700 b/d of gasoline, up by 19pc from the 41,900 b/d average rate in December, according to data from the energy ministry.

In order to improve energy security for fuels supply, the government said yesterday that it wants to create a central agency to coordinate fuel logistics. But Lopez Obrador cast doubt on the proposal at his daily briefing this morning, saying "it has not been decided yet, we have not resolved it definitely." It is unclear whether he meant the details of the proposal remain unclear or whether the government has not yet decided to push ahead with the center at all.

The draft bill said that the Center for Logistics, Distribution and Transport of Refined Products is needed as the government's tactics against fuel theft, including closing theft-prone pipelines, have caused disruptions to the fuel supply chain.

The federal regulatory commission, Cofemer, will review the bill before it is sent to congress for approval.