In a medium saucepan, add 1 cup of water and the piloncillo. Heat over medium-high until the piloncillo melts into a dark, caramel-like liquid.

Add the remaining water, cinnamon stick, guavas, anise seed, and orange peel. Bring to a boil and cook for about 6 minutes. Stir, then continue boiling for another 4 minutes.

Let cool slightly and set aside. For a thicker syrup, simmer longer until it reaches your desired consistency. Store in the fridge for up to a week.

In a large mixing bowl, whisk together flour, baking powder, sugar, and salt.

Form a well in the center, and add the egg, melted butter, and vanilla essence. Gradually pour in the warm water, mixing until the dough comes together.

Knead the dough for about 5 minutes until it becomes smooth and elastic. Cover with a towel and let rest for 30 minutes.

After resting, divide the dough into 12 equal balls. Keep them covered as you work.

On a floured surface, roll each ball into a very thin circle, almost translucent. Use a rolling pin and gently stretch the dough—some even stretch it over an inverted bowl for extra thinness.

Optional: Lay all the rolled-out buñuelos on a clean tablecloth and let dry slightly for a crispier finish.

In a large frying pan, heat about ¾ inch of oil over medium-high heat. The oil should be hot but not smoking.

Carefully place one buñuelo at a time into the hot oil. Fry until golden and bubbly—just a few seconds per side.

Transfer to a paper towel-lined plate to drain excess oil.

While still warm, sprinkle each buñuelo generously with sugar. Serve immediately or store in a warm oven until ready to enjoy.