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LatinNews Daily - 29 January 2019

MEXICO: Another Pemex pipeline explosion

On 28 January, Hidalgo state governor Omar Fayad said that there had been explosion at a pipeline of Mexico’s state oil company Pemex in San Agustín Tlaxiaca municipality, Hidalgo state.

Analysis:

This is the second explosion in Hidalgo in ten days although unlike the first which took place near Tlahuelilpan municipality and claimed 115 lives on the latest (29 January) government report, no one was injured. The latest explosion will fan public concerns about the issue of oil theft in the country (known as huachicoleo) which has emerged as a major problem for President Andrés Manuel López Obrador since he took office last month. It comes as López Obrador’s new national petrol fuel distribution system, which he has rolled out since the start of the year to help combat oil theft, is attracting criticism as a result of fuel shortages due to the temporary closure of many pipelines.

  • Fayad said that the authorities’ report regarding the explosion in San Agustín Tlaxiaca showed a leak where people were syphoning off fuel. However, he said that there was no danger for the population.
  • Yesterday (28 January), President López Obrador cited figures which suggest that a total of 1,684 illegal taps had been identified in the following pipelines: Matamoros–Cadereyta, Cadereyta–Madero, Tuxpan–Tula, Tuxpan–Azcapotzalco, Minatitlán–México, Tula–Salamanca, Salamanca–Morelia, and Salamanca–Guadalajara.
  • President López Obrador also said last year 56,000 barrels per day (b/d) of fuel were stolen on a daily basis, while for the month of November 2018 this rose to 81,000 b/d - and for the first 20 days of December 74,000 b/d were stolen. He said, however, that since adopting the new measures fuel theft had dropped by 65% (without giving further figures).
  • Also yesterday, López Obrador acknowledged that supply problems persist, singling out Monterrey city (Nuevo León state) and the states of Guanajuato, Querétaro, and Michoacán among the worst affected, but he said that the supply of fuel in Estado de México (Edomex), Mexico City, and Jalisco state would be definitively regularised by the end of the week.

Looking Ahead: President López Obrador is seeking to address the supply problems through measures such as acquiring 671 tankers from private companies which would distribute 140,000 b/d and are due to start being delivered from the beginning of February.