Not Quite Measuring Up at Mexico’s Gas Pumps

If you think paying $3.50 for a gallon of gasoline in the U.S. is a hardship, consider Mexico, where motorists are really getting stiffed.

Nine in 10 gasoline stations in Mexico have rigged their pumps to dispense less than what their meters promise, according to federal authorities, who calculated that purloined petrol cost consumers at least $1 billion last year.

Random checks have revealed that the average retailer, known here as a gasolinero, skims a little more than a liter of gasoline for every 20 sold.

But the most audacious stations would make Al Capone blush. One in the tourist haven of Acapulco was recently caught shorting its customers by nearly half the volume displayed on the pump.

The station was busted by Profeco, the nation’s chief consumer watchdog, which has launched a nationwide crackdown on dishonest owners. The agency has mounted surprise inspections, gathering evidence with the help of undercover agents armed with video cameras and vehicles outfitted with special gas tanks that can be removed for lab analysis.

About 1,100 stations, nearly 15% of the country’s total, have been caught in the dragnet this year.

Profeco, or the Procuraduria Federal del Consumidor, is closing stations and fining owners to force them to clean up their acts. It plans to post inspection results on the Internet to expose swindlers. And it has launched a public relations campaign to urge motorists to report gasoline cheats.

It’s no easy task in Mexico, which is dominated by powerful business interests and which has never been friendly to consumers. Decades of corruption at the government petroleum monopoly have conditioned Mexicans to expect a soaking at the pumps.

“To be a gasolinero is synonymous with being corrupt,” said Roberto Karam Ahuad, head of fuel verification for Profeco. “It’s like Chicago in the 1930s.”

The big difference is that even Windy City mobsters had competition. Mexico’s 7,400 retail stations are all franchises of state-owned company Petroleos Mexicanos, or Pemex, which has a lock on production and sales.

Because the Mexican government sets the price of gasoline -- currently the equivalent of $2.18 a gallon for regular unleaded in most of Mexico -- consumers can’t shop for the best deal. Most station owners don’t even bother posting prices. They just switch on the pumps and wait for customers to arrive, a process that critics liken to inviting sheep to the shearing.

Many of the attendants bustling around the pumps in jumpsuits emblazoned with the official Pemex logo are actually unpaid freelancers angling for tips -- and a chance to shortchange distracted customers.

Cab driver Guillermo Tinoco had his game face on as he pulled his green-and-white Volkswagen Beetle into a gas station here recently. He handed a 100-peso note to the attendant and trained an eye on the spinning fuel meter to make sure there was no funny business.

“I don’t know this place, so I’m only buying a little out of necessity,” he said of his $8.82 purchase. “I try to go where they rob me the least.”

Station owners have been known to dilute their fuel with additives to stretch their profits, causing engine damage to clients down the road.

“It’s hard to know” what you’re getting, said Carlos Ivan, 20, a student and part-time taxi driver who said he dreaded his twice-weekly trips to the filling station.

Mexico’s tax collectors aren’t too happy either. Gasoline is a popular deduction for taxpayers here. Slip some Pemex pump jockeys a few pesos and they will whip up an official sales receipt for any amount you like. It’s a practice that officials say is costing the nation millions in lost tax revenue.

Authorities tried last year to close that loophole with legislation requiring taxpayers who want to claim a fuel deduction to pay for their gasoline with a credit card or check, because those sales are harder to falsify than cash purchases. The measure was defeated after stiff lobbying from the nation’s gasolineros.

“Many of these cash transactions are susceptible to fraud,” Jose Maria Zubiria, head of Mexico’s version of the Internal Revenue Service, said in a statement. “The documentation ... is very weak.”

Jose Angel Garcia Hernandez, president of a trade group that represents 80% of the Mexico’s service stations, said he supported a crackdown on scofflaws. But he denied Profeco’s assertions that cheating was rampant or that his members were getting rich on ill-gotten gains.

“[Our] station owners give consumers what they pay for,” he said.

One thing franchisees and consumer advocates agree on is that things are a lot better than they used to be.

Mexican officials for decades handed out Pemex concessions to cronies who ran them like personal fiefdoms. Stations were renowned for their poor service, crumbling facilities and restrooms so foul that many travelers preferred the roadside.

These shabby outposts were humiliating and infuriating to many Mexicans, who still celebrate the nationalization of their oil industry. Public outrage grew with a series of deadly accidents. Those included a 1992 sewer blast in Guadalajara triggered by a leaky gasoline pipeline that destroyed an entire neighborhood, killed more than 200 residents and left 15,000 homeless.

To modernize its stations and expand its network of fuel sellers, the oil giant that year shifted to a franchise system. Private capital poured in as entrepreneurs purchased the rights to construct and operate Pemex stations. Modern facilities mushroomed.

But franchisees continued the long-standing practice of selling litros incompletos, or short liters, to bolster their profits, helped by the very consumer agency that was supposed to be protecting the public, according to Profeco’s Karam. Some inspectors responsible for verifying the accuracy of pumps accepted bribes from station owners to look the other way, he said.

Things began changing in 2004 when Mexican President Vicente Fox appointed lawyer Carlos Arce Macias to head the consumer agency. Under his direction, Profeco fired corrupt inspectors and hired new ones at significantly higher salaries, but not before requiring them to undergo polygraph tests and background checks.

“Our first commitment is honesty,” Arce Macias told the official government news service this year.

His investigators now include clean-cut professionals such as Jose Jimenez Cruz, a 33-year-old engineer sporting black chinos, a neat button-down shirt and a clipboard, who spends his days doing spot inspections of gas stations. It’s a process similar to that found in California, where every county has weights-and-measures inspectors to verify the accuracy of gas pumps.

On a recent afternoon, Jimenez and three co-workers descended on a Pemex station in the capital’s middle-class Colonia del Valle neighborhood. Toting plastic buckets, a tool kit and a special 20-liter metal measuring canister, they showed their Profeco badges to the station manager, who did not object to their getting right to work.

Jimenez and the others said they have been stalled, harassed and offered money to leave by workers at some Pemex stations.

Over the next several hours, they performed tests to see how closely the volume of liquid pumped into their canister matched the reading on the gas pumps. Halfway through the exercise, things were looking good for this station. But Jimenez said that’s not unusual, because many dishonest owners have a reset button that they can push from their offices when inspectors arrive to restore their equipment to dispensing full liters.

He said the team wouldn’t know whether the station was clean until data extracted from a computer chip inside the electronic guts of the station’s pumps could be examined for irregularities at Profeco’s headquarters.

Jimenez said he felt proud to be doing his part to turn the tide of corruption that has made life so difficult for so many in Mexico -- if only one liter at a time.

“You have to start somewhere,” he said.