Mexico Halts Fuel Imports at Texas Border as Inspections Ramp Up

Fuel shipments from Texas headed to Mexico have ground to a halt as the Mexican government cracks down on imports over tax payments.

The Texas-Mexico land crossing has been effectively closed for two weeks for trucks carrying fuels such as gasoline and diesel after the government ramped up cargo inspections, according to people familiar with the matter. One fuel distributor who asked not to be named as the matter is not public, said its fuel trucking business to the border dried up overnight after customer demand dropped following the heightened scrutiny.

Mexico is the top destination for US fuel, with 1.15 million barrels of petroleum products entering the country daily in January, according to data from the US Energy Information administration. The bottleneck at the border comes as Mexico ramps up monitoring on possible illegal fuel shipments coming into the country, where the slowdown could back up supplies in the US and increase costs for transporters and gas stations in Mexico. 

Mexico imported 470,000 barrels a day of finished motor gasoline from the US in January alongside 237,000 barrels a day of diesel. Most fuel imports into Mexico come by ship, but the issues at the land border are evidence of the wider crackdown.

Mexican drivers are unlikely to be immediately affected, however, as pump prices in the country are currently controlled under a six-month fuel pricing agreement signed by President Claudia Sheinbaum in February.

Heightened scrutiny at the Texas border is the latest in the Sheinbaum administration’s efforts to police fuel importers who have been paying no or incorrect taxes on their shipments, Mexican energy trader Indimex Group’s chief executive officer Rajan Vig said. Vig doesn’t expect the border to reopen for oil product shipments this week ahead of religious holidays leading up to Easter Sunday.

An energy ministry spokesman and a spokesperson for President Sheinbaum did not immediately reply to requests for comment.

The crackdown comes amid strained US-Mexico trade relations as President Donald Trump imposes tariffs on its single largest trading partner and threatens to upend treaties between the two nations on everything from water to tomatoes. Still, President Sheinbaum has stated that cutting off the illegal fuel trade is a priority, promising to tackle the problem that costs the state oil company Petroleos Mexicanos billions of dollars a year in lost revenue.

Last month, Mexico seized more than two million gallons of what the government deemed illegally imported fuel at a storage facility in Baja California. A week later, authorities seized a tanker ship at the port of Tampico carrying diesel, part of a broader operation to “combat illegal fuel trafficking,” the country’s Secretary of Security Omar García Harfuch wrote in a post on X.

The Singapore-flagged Challenge Procyon tanker was loaded in Beaumont, Texas, on March 16 at Enterprise Product’s fuel terminal, according to commodity data provider Kpler. Enterprise says it was unaware of the situation — “We loaded customer-supplied diesel on a customer-chartered ship,” a company spokesperson said in an emailed statement.

Last week, Mexico’s tax authority also temporarily suspended Valero Energy Corp.’s permit in its importers registry, preventing the company from bringing fuel into the country. The suspension was due to apparently falsified paperwork used by illegal importers that was apprehended during the government’s sting operations, according to a person familiar with the matter who asked not to be named discussing an ongoing investigation.

Illegal imports continue to be a major problem for Pemex, which lost at least $263 million in the third quarter of last year to fuel theft, more than double its losses from the same period a year prior. The company in recent days has asked Mexican citizens to help report theft and sales of illegal fuel, according to posts on X.

Pemex, the world’s most indebted oil company, lost at least $1.2 billion to import fraud and fuel theft in 2023, according to company data.

A Pemex spokesperson said the company is working with the relevant authorities to combat illicit fuel trafficking.