Lima, Peru — A pipeline explosion in southern Peru last week triggered an energy crisis that exposed structural vulnerabilities little known outside the country. This means that Peru relies almost entirely on a single natural gas transportation system to supply its economy.
The accident occurred on March 1 at the 43 km point of the Camisea gas project pipeline, operated by Transportadora de Gas del Perú in the province of La Convención, Cusco region.
After the explosion, authorities halted gas flows while repair work took place.
The government declared a national emergency for 14 days and launched a system to prioritize gas distribution for home use, power generation, and public transportation.
The results were immediate. Long lines of vehicles formed at gas stations in Lima and other cities as drivers looked for gas or gasoline.
“I drive on natural gas because it’s cheaper. Now they tell me to use gasoline, but in practice it means I earn nothing,” said Carlos Quispe, a taxi driver in Lima. Peru Report. “Many of us are living day to day. If gas is not restored soon, thousands of families will lose their income.”
At many stations, vehicular natural gas (CNG) is limited to transit buses only, making it inaccessible to taxis and private cars.
“We have priority to fill up with gas, but we keep going from station to station until we find a gas station with gasoline,” said Jose Ramirez, a public bus driver in Lima. “If we also run out of gas, the city’s transportation system will come to a halt,” he said. Peru Report.
vulnerable system
The biggest problem lies not only in the explosion but also in the structure of Peru’s energy system.
Gas produced by Camisea, one of South America’s largest energy projects, travels hundreds of kilometers from the Amazon to the coast through a single pipeline corridor.
When that system fails, the impact spreads across the country. That scenario became a reality this week.
In Peru, nearly 40% of electricity is generated using natural gas. They are also used by thousands of industries and millions of households for cooking, heating water and fueling vehicles.
Domino effect on the economy
The impact has already reached consumers. In just a few days, gas prices rose by 2 to 3 soles per gallon ($0.50 to $0.80 per gallon) at many gas stations. Prices for household gas cylinders have also begun to rise in many parts of the country.
Minister’s Difficult Debut
The crisis also marked the first major test for the new Minister of Energy and Mines, Angelo Alfaro, who took office shortly before the incident.
At the press conference, Alfaro called for calm, but his comments sparked controversy.
“We don’t have a magic wand that can solve the problem. If taxi fares rise due to this situation, anyone who wants to take a taxi will have to pay,” he said.
The minister’s comments drew criticism from some political sectors and transport unions, who said the crisis was particularly affecting informal workers and low-income families.
The situation is unfolding as international oil prices rise due to attacks on Iran by the United States and Israel.
Peru faces strong exposure to international markets, according to Felipe Cantuarias, president of the Peruvian Hydrocarbons Association.
“On the gasoline side, we are facing a huge storm. The rise in prices of gasoline, diesel and LPG is linked to the international situation and the conflict in the Middle East. Today the market opened with crude oil at $107 per barrel, which is a very big blow for us. We import 75% of diesel and gasoline and 30% of LPG. We are fully exposed,” he explained to Exitosa on March 9.
Debate over the country’s energy future
The crisis has also reignited debate over Peru’s energy security. Experts say the country must invest in infrastructure to prevent a single incident from crippling the system.
Measures being discussed include building backup pipelines, installing liquefied natural gas import terminals on the coast, and accelerating the exploration of new gas fields.
“It’s surprising that even though Peru has natural gas, which is 90 percent cheaper than diesel or gasoline, many areas still don’t have access to it,” Cantuarias said.
The government now hopes repairs to the pipeline will allow supplies to resume within about 14 days. But even if the crisis is resolved quickly, Peru will still rely on weak infrastructure despite having significant natural gas reserves.
Featured image: Camisea gas field in Cusco region
Image source: Andina Agency
