On Wednesday, President López Obrador said he was winning the battle for hearts and minds against a gang of fuel thieves in the town of Santa Rosa de Lima, Guanajuato, home to one of Mexico’s main oil refineries .

In the town inhabited by around 2,800 people, where authorities say the Santa Rosa de Lima cartel paid residents to obstruct marines and federal police with blockades , burn vehicles, and by informing on their movements, some were less certain the government had the upper hand.

Inhabitants accused security forces of damaging private property and breaking car windows in the raids while denying they were in collaborating with the gangs .

Santa Rosa

is a microcosm of the lawlessness that prevails in Mexico , where cartels have replaced the state as benefactors, providing jobs and handouts in return for the residents’ loyalty .

The effort to capture gang leader José Antonio Yépez , known as “ El Marro ,” or “The Mallet,” accused of stealing vast quantities of fuel from the Salamanca refinery , is also a test of the government ’s ability to end organized crime’ s growing threat to legitimate businesses and ordinary citizens.

Fuel theft

costing billions of dollars a year, along with dwindling output, has weighed heavily on state oil firm Pemex , threatening to damage the government’s creditworthiness.

This week, rating agency Moody’s warned that “increasing insecurity , robbery and travel warnings hurt Mexican companies’ top lines.”

Since López Obrador, who took office on December 1, set his sights on fuel theft soon after taking office, turning off oil pipelines and risking a public backlash as lines began to form outside gas stations.

This week he addressed the violence in Santa Rosa by urging Mexicans to reject criminal handouts.

“If you need work because of a lack of job opportunities, if you need welfare support, you can depend on us,” he said on Tuesday. “We’re the ones who offer you this.”

Yépez

has so far evaded detention, though federal forces arrested his sister-in-law, alleged to be his finance chief, along with six others on Tuesday, a security official said.

By Wednesday, the president was saying Santa Rosa had begun to reject the gang’s money , which locals said they heard included payments of MXN $1,000 or more . The burning blockades and protests vanished on Wednesday.

Among evidence authorities have found in raids was a wage envelope stamped with what appeared to be a symbol of a mallet , reading: “Relatives should go out to protest when required.”

Though reluctant to speak of fuel theft , several residents said they had seen El Marro and that the town was peaceful until “outsiders” began to arrive a few years ago.

Guanajuato’s governor, Diego Sinhue

, estimated that around 300 people helped set fire to vehicles , although he defended the town against its infamy as a crime hotbed.

In Guanajuato , security has sharply deteriorated as cartels struggle to control fuel theft , and at 2,609 last year, murders in Guanajuato were over 10 times higher than a decade earlier, official data show.

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