Fuel theft has spiked in Ecuador as security forces grapple with a growing front in the country’s crime war that recent diesel subsidy cuts could exacerbate.
The armed forces discovered 1,095 illegal pipeline taps in just the first nine months of 2025, up from 334 in 2022 and 994 in 2023. Law enforcement also seized more than one million gallons of illicit fuel so far in 2025, 78% more than the amount from all of 2024.
The updated seizure numbers were announced days after the Ecuadorian government removed a $1.1 billion diesel subsidy that caused pump prices to lurch from $1.80 to $2.80 a gallon. Prices are now roughly the same as prices in neighboring countries for the first time since 1974.
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The government claimed that removing the subsidy will allow it to spend more on other social programs and that the move would cripple fuel trafficking networks that have long profited from moving cheap fuel out of Ecuador and selling it in neighboring Colombia and Peru.
The removal of the subsidy is a “key measure that cuts off smuggling incentives … and makes it difficult for mafias to access cheap fuel for their illicit operations,” the Defense Ministry said in a statement.
InSight Crime Analysis
Eliminating the diesel subsidy cuts opportunities for smugglers who buy cheap fuel in Ecuador to sell in neighboring countries, but it increases incentives for criminal groups to steal fuel that they use in various illegal activities.
Fuel theft is already rising. State-owned oil giant Petroecuador estimated that theft had cost the company $215 million between 2022 and October 2024, according to a report by Reuters, and the number of illegal taps detected on the country’s pipelines has more than tripled in the last three years.
The increase in theft coincides with previous hikes in the price of gasoline, which has nearly doubled from 39 cents per liter in 2018 to 76 cents in September 2025, according to energy monitor Global Petrol Prices. The price rise was driven by the gradual phase-down in government subsidies, which began in 2019 as part of long-running cost-cutting measures required to access funds from the International Monetary Fund.
As prices increased, criminal groups have changed the way they source fuel, according to organized crime expert Renato Rivera.
“Smugglers once bought gasoline directly from the gas stations,” said Rivera, but “once the fuel privatization process took place in Ecuador, the smugglers changed their tactics and began to extract fuel directly from the pipelines.”
Ecuador is not the only country to battle these dynamics. In Mexico, the removal of fuel subsidies starting in 2009 caused pump prices to soar. In the years that followed, heavily armed criminal groups muscled in on fuel theft and transformed the criminal economy from a racket run by local gangs into a multibillion-dollar criminal enterprise.
As in Mexico, criminal groups in Ecuador use cheap fuel to turbocharge their illicit profits. Gasoline is a key precursor for the production of cocaine. Drug producers in Colombia’s coca-rich border states, Nariño and Putumayo, have long used smuggled or stolen fuel from northern Ecuador to avoid tipping off Colombian authorities to the presence of cocaine laboratories by creating excessive demand from local gas stations.
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Producing one kilogram of the drug requires as much as 284 liters of fuel. When gasoline is scarce, thieves also tap Ecuador’s crude oil pipelines and use clandestine refineries to produce a knock-off gasoline called pategrillo. Gasoline also fuels the go-fast boats that use Ecuador as a launching point for drug shipments headed for Central and North America.
Diesel also has substantial demand in the criminal underworld. Narco submarines, many constructed in Ecuador, are mostly fitted with diesel engines. The fuel also powers dredging machines used by illegal miners to chew through riverbeds in remote regions of Ecuador and Peru. Record gold prices in recent months have caused the criminal economy to boom and propped up illicit fuel demand.
Featured photo: Oil workers repair punctured pipeline in San Rafael, Ecuador. Credit: Petroecuador