To combat fuel theft, Pemex reduces gasoline and diesel pipeline shipments

Petroleos Mexicanos will stop using its Mexican pipeline network to transport refined fuel in an effort to reduce theft that surged 66 percent last year.

Pemex, as the state-owned producer is known, will send only partially-processed gasoline and diesel through pipelines to storage terminals where it will undertake final processing, the Mexico City-based company said in an e-mailed statement.

By limiting pipeline transport to unfinished fuels that would damage engines, Pemex is trying to contain theft that’s siphoning off earnings at a time the state monopoly is cutting costs in preparation for the industry’s liberalization.

Pemex reported 3,600 illegal fuel taps on pipelines last year, a 66 percent increase from the 2,167 a year earlier, costing the company an estimated $792 million. Pilfering more than quadrupled from 2009 to 2013, according to Pemex, which partially attributes its decade-long slide in production to the increase in illegal taps.