| | |  News Around the Republic of Mexico 
Fatal Oil Blast Spotlights Mexico's Fuel Thieves
 Robert Campbell - Reuters
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December 21, 2010
Mexico City - Mexican thieves have long had a lucrative sideline in siphoning fuel from the country's pipelines to sell on the black market and although authorities have made progress in cutting the amount of oil diverted, few of the accused end up behind bars.
Authorities are investigating whether a fuel tap gone wrong was to blame for a pipeline explosion that killed 28 people outside Mexico City Sunday. The tragedy has highlighted the prevalence of fuel theft.
The head of state oil company Pemex said although technical problems could not be ruled out, "another likely cause is an illegal tap which got out of control."
Disruptions left in the wake of the mishap have not damaged the state enterprise's fuel refining and transport ability, the state enterprise said on Monday.
"The national refinery system, specifically the Tula and Hidalgo refineries, can rely on a sufficient crude inventory to continue their normal production," read the Pemex statement, which identified the damaged ducts as crude oil pipelines.
Pemex chief Juan Jose Suarez told local radio that the enterprise had detected more than 580 illegal taps in 2010, including more than 100 in the pipeline affected by the explosion.
President Felipe Calderon, who visited the site of the blast Sunday, called for an investigation and promised to apply the full force of the law to those responsible.
Authorities believe fuel thieves steal hundreds of millions of dollars a year in fuel. Thieves are rarely brought to justice, and profits have attracted the attention of the country's vicious drug gangs.
Pemex, the world's No. 7 crude oil producer, says it is finding an increasing number of illegal connections to its pipelines, although the amount of fuel stolen has fallen.
The company says stolen oil fell 38 percent to 3.1 million barrels in 2009 - still worth $350 million at current pump prices - even as the number of illegal connections it found on its network rose to 439, compared to 2008.
But Mexico's creaking justice system has made little progress in smashing the gangs behind the thefts.
Since 2000, Pemex has made more than 2,600 formal complaints over fuel theft. But as of August of this year, only 15 cases had resulted in convictions, according to data obtained through a freedom of information request - less than one in 170. Another 345 cases remained open. Mexican federal prosecutors did not respond to requests for comment.
Corrupt Pemex employees are widely suspected of having a role in the fuel theft rings as few other people have the knowledge of where the pipelines are buried, the schedules for which fuels are moving down the lines and the sophisticated skills needed to tap into an oil pipeline as it is running.
Federal prosecutors even raided Pemex headquarters in July 2009, carting off computers and other evidence, but have not announced any arrests in connection with the raids.
The most significant success against fuel theft rings in recent years has been achieved in U.S. courts. At least five people have pleaded guilty in an ongoing investigation into the smuggling of stolen Mexican natural gas condensate - a gasoline-like by-product of natural gas production used in petrochemical plants.
Pemex received $2.1 million from U.S. customs authorities in 2009 in connection with the investigation. The company is pursuing further redress in U.S. federal courts from the small companies that are alleged to have participated in the smuggling and resale of condensate to major corporations who unwittingly bought the stolen oil.
Yet despite widespread allegations in court papers of heavy participation by Mexican drug gangs in the condensate smuggling, including the claim that the gangs have ripped off more than $300 million worth of condensate since 2006, Mexican officials have not announced any convictions in connection with the case.
(Editing by David Gregorio, Gary Hill)
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