Passing gas

It’s particularly rich that Felipe Calderón (remember him… used to be President) is whining about “collateral damage” from the crackdown on gasoline theft here.

Calderón after all, was the guy who … ridiculous as he looked in a military uniform… went all John Wayne (though he personally looked more Radar O’Reilly) when it was the US supported “drug war”… sending the military out to “wipe out” the leaders of the various narcotics export businesses. When innocent people were killed in the process, he wrote it off as “collateral damage”. Oh, but when people are inconvenienced by the government’s use of the military to crack down on wholesale gasoline theft (gas thieves are know as “huachicoleros”), it’s a whole other matter.

The ex-president is, of course, seeking to gain some legitimacy among the fractured opposition to the new government. As it so, so far, it is what is now the opposition… the former majority parties, PRI and PAN, who have the most to lose in the crack-down. Since 2000, and the beginning of the PAN-PRI duopoly on state power, PEMEX … the people’s oil company… has lost something on the order of 66 billion pesos just to people siphoning off gasoline. This was more than a few poor slugs drilling into a duct here or there (and getting themselves blown to kingdom come occasionally… the cost of doing business) or hijacking a delivery truck, but robbing the nation on a massive scale.

I don’t know how much money is estimated to be in the narcotics export trade, and “get” that criminal enterprises are socially undesirable and that people who get in the way end up dead, but I do know that the narco money was never expected to pay for state expenses… you know, for things like building highways, or paying nurses, or providing old age insurance, or health inspections, or… whereas PEMEX revenue was. It is, after all, the single largest source of government income.

But, with creeping privatization, begun under the Fox Administration, PEMEX revenues dropped precipitously. Mexfiles has always assumed that during the Fox, Calderón, Peña Neito administrations, PEMEX was mismanaged by design, the better to sell the need for privatization. But, it appears that those mismanagers had something even bigger in mind. Actively neglecting security (and, it appears, profiting by it), they allowed the huachicoleros free rein. Not the little guys stealing a few thousand liters of premium here and there, and selling it from “pop up” gas stations, but wholesale theft, requiring the cooperation of PEMEX executives, state and federal officials, and some sophisticated bookkeeping.

Those on the right who have noticed that the worst shortages are in areas where the still have control are quick to scream “Venezuela!!” as if the government is somehow devious enough to cut their area’s gas deliveries while managing to keep gas in stock in other areas… perhaps it has something to do with huachicoleros having been tolerated (and perhaps encouraged) in the old party controlled areas, but not where the new party has come to power? Maybe it’s just that where stolen gasoline was available, consumers naturally took advantage of the lower prices, and with the supply cut off, those consumers are having to compete with the honest consumers for a limited resource?

Or, as Cécile Boulnois (a particularly astute Breton who happens to live here, and knows what’s she’s talking about) pointed out, it’s something I should have already known… I wrote training documents for what was then Exxon, for controlling gasoline deliveries to stations. A pretty simple scam… normally a station sends orders for its anticipated monthly needs to a central computer, which calculates what is in the distribution center, and schedules deliveries. But, if a station is buying off the books, it just lowers its orders over time, enough to keep it profitable on paper, but not enough to draw attention by having high volume sales. WHich it does, making up the difference with supplies coming from huachicoleros… the same gasoline, so the customers don’t notice the difference. And, PEMEX doesn’t notice, because so many gas purchases are cash, which the station can easily under-report.

The consumer isn’t hurt by the scam, but the state is. Besides the gas being siphoned off (wholesale… just yesterday, the Army found a two kilometer “side duct” on a major pipeline, leading to a clandestine storage center), it was purchased at below market cost and without being taxed. Several hundred stations around the country have been closed for pulling this stunt, or have only been reopened under new management, or after changing their order processing to reflect real sales.

Major fleet buyers have also, apparently, been … er… tapping into the huachicolero market, probably under-reporting actual purchases, and submitting false invoices to the tax authorities to account for the difference. Or just under-reporting… and are said to be in a heap of trouble.

Yeah, there is a gasoline shortage right now. It may last longer than anyone anticipates, but in the end, it should mean more revneu for the state, without much affecting the consumer cost for gasoline. He can whine all he wants, but Calderón’s crack-pipe dreams of the days when the state went after Sinaloan hill billies who were (until he came along) more a danger to each other than to the state itself, and provided a sizable second income to favored state employees are done.