January 15, 2019 / 1:09 AM / 8 months ago

Mexico expects faster fuel transportation to drain inventories

MEXICO CITY, Jan 14 (Reuters) - Mexico's freight transport association expects a contingency plan aimed at speeding up gasoline distribution that began over the weekend to help ease bottlenecks at terminals, where fuel inventories have been accumulating in recent weeks.

President Andres Manuel Lopez Obrador's crackdown on rampant fuel theft has caused long lines of angry motorists waiting to fill up their tanks since a handful of Mexico's most important fuel pipelines were closed to avoid further losses.

The switch to more road distribution has slowed down deliveries to gas stations as crowded fuel terminals owned by state-run Pemex's create bottlenecks with tanker ships waiting to discharge imports at several ports.

The National Chamber of Freight Transport expects faster truck loading, direct deliveries and better security can increase fuel distribution by road to 50 percent of the 1.27 million barrels per day (bpd) of gasoline, diesel and jet fuel Mexico consumes, compared with a current average of about 30 percent.

"This is a contingency plan for using existing assets to achieve a larger capacity of (fuel) distribution," said chamber President Enrique Gonzalez.

Transporters have asked Pemex to speed up loading at terminals to a maximum of four hours from 8-18 hours currently. Before Lopez Obrador's anti-theft push, each truck would spend up to 72 hours at Pemex's distribution centers, Gonzalez said.

The chamber represents companies with a combined fleet of 3,500 double-tank fuel trucks capable of loading up to 62,000 liters each.

The contingency plan also contemplates direct delivery from terminals to gas stations, without passing through Pemex distribution centers.

Large convoys of gasoline trucks are now a common sight along Mexican highways. The vehicles are given a military escort since Lopez Obrador moved thousands of soldiers and police to supervise and protect refining and distribution.

Mexico's central region, including the capital, has been most affected by the shortages since a key pipeline from Pemex's Salamanca refinery was shut in late December.

Some 150,000 bpd of gasoline are lost due to theft, according to Reuters calculations based on official data. The problem caused a $3 billion loss for Pemex last year.

Lopez Obrador's offensive against gasoline robbers marks his first attempt to tackle entrenched corruption since taking office on Dec. 1.

As of Jan. 14, the number of tankers waiting to discharge imported fuel at Mexican ports grew to 48 compared with 39 at the end of last week, according to Refinitiv Eikon data. That represents a hold-up of about 14 million barrels.

Gasoline imports - which represent three-quarters of the country's consumption - typically dip in January due to lower demand, but shipments so far this year have declined even more than usual as drawing down inventory is running slower.

Total gasoline imports fell to 370,000 bpd in the first nine days of January, down by a quarter versus the same period last year, according to ClipperData.

Traders say the fall in imports is due to less purchases by Pemex, which is struggling to transport gasoline from congested ports and terminals, but also by less private imports since fuel taxes were increased at the beginning of the year.

Reporting by Marianna Parraga and Sharay Angulo; editing by David Alire Garcia and Lisa Shumaker

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