Last month, I had relatives from Canada visiting my family here in Querétaro. We had a grand time driving all over the place and visiting tourist hotspots that we just haven’t had time to explore ourselves since arriving. The downside, of course, is the high cost of fuel that comes with so much travelling.
From my experiences in visiting Mexico many years ago, I recall a very different situation. At the time, Pemex (the federally-owned monopoly for all gasoline distribution in the country) benefited from government subsidies, which ensured that fuel prices stayed low. If memory serves, back in 2013 fuel prices here were equivalent to about $0.70 CAD per litre. That was far lower than what we were seeing in Canada at the time.
Pemex ran into serious financial problems and the government entity became a major drain on resources. To remedy the situation, the government decided to remove the gasoline subsidy, causing prices for the commodity to spike to the highest prices ever seen. The hue and cry resulting from the higher cost was predictable.
The federal corporation continued to lose money, so another solution had to be found. To combat rising prices and the ongoing outcry from drivers and companies alike, the Mexican government decided to abandon the fuel monopoly and open the country to more foreign investment and competition. In short order, a number of foreign players began grabbing market share. Shell, Mobil, Total, BP, Arco and a couple dozen other operators quickly began to build new stations or took over and refurbished old Pemex stations. Pemex, continues to be the sole owner/operator of pipelines and storage facilities within Mexico. Most other entities still buy their fuel from Pemex as the only available supplier in the country. A few, like Mobil, bring their own supply into the country.
Rather than improving gasoline prices through competition, it almost seems that the opposite has happened. Here in the state of Querétaro, drivers are seeing some of the highest gasoline prices in years, with stations charging up to $20 pesos a litre for regular gasoline (currently equivalent to about $1.37 a litre). At that price, gasoline costs are on par with pricing back in Canada (Calgary, at least).
My Nissan Murano is fairly good on fuel, even though it has a spritely six cylinder under the hood. Compared to the Lincoln SUV I had previously been driving in Canada, it seems positively economical. Still, when fully loaded, the Nissan only achieves about 12 litres per 100 KM, which certainly isn’t stellar. With five of us in the car for all the driving we’ve recently been doing, fuel economy was definitely down.
The aggressive driving style and inexplicable use of traffic calming measures used here in Mexico also seriously impact our fuel economy. Almost all the ‘acceleration’ lanes that take you from a low speed lateral onto a high-speed road feature ‘topes’ (speed bumps) just before the lane ends. This pointless feature forces you to slow down to a crawl to prevent losing an axle on the steep-sided speed bumps. This deceleration is followed by the immediate need to ram the accelerator pedal to the stops in order to get up enough speed so you don’t get pulverized by the ridiculously fast highway traffic you need to merge into. None of this is good for fuel economy.
After all of our driving about earlier this month, I was down to a 1/4 tank of gas, so I pulled into the nearest Pemex station to refuel.
At that point, something odd happened. I couldn’t buy gas. No, not because I forgot how (but thanks for the vote of confidence)!
The attendant at the Pemex informed me that they had no gasoline. As I have heard this can happen sometimes, I wasn’t too concerned. Stations do sell out sometimes. No problem. It happens here.
I drove to the next Pemex down the highway. I asked the attendant to fill with ‘verde’ (green, or regular). He informed me that they only had the ‘rojo’ (‘red’, meaning premium) gasoline available. My Nissan can’t burn premium due to the elevated octane level; the higher heat could actually damage the aluminum block. So that wasn’t going to work either. To ponder the situation, I decided to have lunch, joining some friends for some great barbacoa (sheep tacos) in the Cimitario area.
The parking lot for the restaurant happens to be near another Pemex, so on the way back to the car, I walked over to ask them about fuel. They told me they had no gasoline either. I asked where I could find fuel, and they directed me to a nearby Mobil station they thought might still have some.
At this point, I was becoming concerned. I was now below my 1/4 tank mark on the gauge. From past experience, I have found that the top 1/4 of my tank takes quite a while to burn, but the bottom 1/4 goes very fast. According to my trip computer, I still had over 100 km to empty, but I’ve never really trusted that calculation, or had reason to test it.
Thankfully the Mobil station still had fuel, so I gratefully filled up the tank. Since my grasp of Spanish is pretty rudimentary, I really don’t pay much attention to the local news, but I was curious about why the overall shortage of fuel in the city.
I assumed the gasoline shortage was just a simple logistics or supply issue. As it turns out, that was somewhat true, but with a sinister reason behind it.
Graft and corruption seem to be a way of life in Mexico. Everybody knows it happens. Nobody likes it. Nobody (including the government) seems equipped to actually stop it. From what local friends have told me, this is normal life in a lot of ways. The gasoline shortage situation, as it turns out, is another effect of the current war between the organized crime syndicates and the government.
Gasoline theft is big business in Mexico. Cartels are actively involved in tapping into gasoline pipelines in remote areas of the country, filling up a few tankers with gas, then disappearing into the night. Sometimes, employees at refineries and tank farms support the illegal activity, helping the criminals to syphon off huge quantities of fuel right at the refinery itself. The illicit supply is then sold at a discount to select stations who aren’t too concerned about the origins of the low-priced fuel. The organized crime groups apparently does quite well with this lucrative sideline to their usual business. By one report, the illegal gasoline trade is worth $3 billion pesos a year (over $200 million CAD).
This activity does not impress the government, who mobilizes the army to patrol city streets and highways using humvee’s fitted with .50 calibre machine guns as a deterrent to this kind of illicit activity. Seeing military on the streets has almost become second nature to me now. (In Canada, seeing military around the city was a fairly rare event. Here in Mexico, everything from supermarkets to office supply stores hire shotgun-toting guards to discourage theft. Thieves apparently find 12 gauge slugs sufficiently demotivating to deter petty theft.)
The government’s response to the fuel theft problem is highly unpopular with the drug cartels, who object to anything that cuts into their profits. The president’s solution to the problem of theft from pipelines is to stop using pipelines to distribute the fuel. What he apparently didn’t consider was the huge logistical challenge of trying to replace that volume with trucking.
In response to the challenge, the criminal organizations have issued death threats to Pemex tanker-truck drivers in an attempt to choke the new supply lines. Drivers, afraid for their lives, have decided that discretion is the better part of valor, electing to temporarily abandon their deliveries rather than risking a confrontation with the criminals.
The result is a serious shortage of fuel, which is affecting most of the central states in Mexico. This past couple of weeks, I have witnessed long lines waiting for fuel at the few stations that still have a supply remaining. In one case, a woman in Guanajuato waited in a fuel lineup for twelve hours! Many people run out of fuel while in the lines, so it is not uncommon to see people pushing their cars as they attempt to reach the pumps.
How long the situation will last is difficult to say. Mexico seems to have a long history of resisting the drug cartel activities, often with limited success. Various governments over the past few years have tried everything from zero tolerance policies and harsh penalties for the drug trade (which under President Fox resulted in open street wars and great loss of life) to a policy of ‘live and let live’ with tacit agreements between crime kingpins and the government designed to maintain an uneasy peace.
While this situation may seem concerning, this is just part of everyday life here in Mexico. Graft and corruption permeate Mexican society on every level. I am sure that this affects the prices we pay for most things here in Querétaro, but in actual fact, it really doesn’t have much of an impact on daily life. Life goes on regardless of these challenges.
The situation really came to a climax last Friday. In Hidalgo state, there was a typical pipeline theft by criminals in the early morning hours. They tapped into the active pipeline, took what fuel they wanted, then left the pipeline gushing fuel into the farmer’s field.
In the morning, local people who discovered the leak immediately capitalized on the situation, bringing water jugs, buckets, cooking pots and anything else that could hold liquid to grab what they could from the free fuel fountain. In the news videos I’ve seen, you can see hundreds of people carting away as much fuel as they can carry. The military turned up to try and control the situation, but before they could secure the scene and get a barrier in place, the inevitable happened.
Something ignited the fuel supply. The resulting explosion and fireball killed 66 people, with more than 70 injured in the blaze.
This week, things seem to be more under control with the local supply situation. Some of the Pemex stations are still closed, but most stations seem to have a supply again, and lineups are usually only a few cars.
What the President intends to do to fix the underlying problem is unclear. What is clear is that many Mexicans are losing patience with the situation. In the past, Mexican culture was such that nobody questioned sources of authority. It was for that reason that institutions like the Catholic church, the police and government were inviolate. That attitude is changing, and people now seem more inclined toward civil acts of disobedience if they feel there is an injustice.
I am grateful that the fuel supply is somewhat stabilized. All the same, I am making sure that we don’t let the car fall much below the 1/2 tank mark before filling up again.
Things in Mexico tend to be a bit uncertain and unpredictable. Developing the ability to go with the flow and accept as ‘normal’ things that go wrong seems to be an important life skill here. That is a skill I am still working on, but with each passing month it seems easier and easier!