Lima, Peru — A pipeline explosion in southern Peru last week has triggered an energy crisis, exposing a structural vulnerability little known outside the country: Peru relies almost entirely on a single natural gas transport system to supply its economy.
The incident occurred on March 1 at kilometer 43 of the Camisea Gas Project pipeline operated by Transportadora de Gas del Perú, in the province of La Convención, in the Cusco region.
Following the blast, authorities suspended the gas flow while repair work is carried out.
The government declared a 14-day national emergency and activated a rationing mechanism to prioritize gas for households, electricity generation, and public transportation.
The consequences were immediate: long lines of vehicles formed at service stations in Lima and other cities as drivers searched for gasoline or gas.
“I work with natural gas vehicles because it’s cheaper. Now they tell me to use gasoline, but that means I practically earn nothing,” Carlos Quispe, a taxi driver in Lima, told Peru Reports. “Many of us live day to day. If the gas doesn’t come back soon, thousands of families will lose their income.”
At many stations, vehicle natural gas (CNG) has been restricted exclusively to public transport buses, leaving taxis and private cars without access.
“We do have priority to fill up with gas, but we’re still going from station to station until we find one that has it,” said José Ramírez, a public bus driver in Lima. “If the gas also runs out for us, the city’s transportation system will come to a halt,” he told Peru Reports.
A vulnerable system
The central problem is not only the explosion but the structure of Peru’s energy system.
Gas produced in 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 entire country. That scenario became reality this week.
In Peru, nearly 40% of electricity is generated using natural gas. In addition, thousands of industries and millions of households depend on it for cooking, heating water, or fueling vehicles.
A domino effect on the economy
The impact has already reached consumers. In just a few days, gasoline prices rose by between 2 and 3 soles per gallon ($0.50 and $0.80 per gallon) at several service stations. The price of household gas cylinders has also begun to increase in different regions of the country.
A difficult debut for the minister
The crisis has also become the first major test for the new Minister of Energy and Mines, Angelo Alfaro, who took office shortly before the incident.
At a press conference, Alfaro called for calm, but his remarks sparked controversy.
“We don’t have a magic wand to fix things. If taxi fares go up because of this situation, anyone who wants to take a taxi will have to pay,” he said.
The minister’s comments were criticized by some political sectors and transport unions, who argue that the crisis particularly affects informal workers and low-income families.
The situation is also unfolding amid rising global oil prices following the U.S. and Israel’s attack on Iran.
According to Felipe Cantuarias, president of the Peruvian Society of Hydrocarbons, the country faces strong exposure to international markets.
“In terms of gasoline, we are facing a perfect storm. The increase in gasoline, diesel, and LPG prices is linked to the international context, to the conflict in the Middle East. Today the market opened with crude at $107 per barrel, and that hits us very hard. We import 75% of our diesel and gasoline and 30% of our LPG — we are completely exposed,” he explained on March 9 to Exitosa.
A debate over the country’s energy future
The crisis has also reopened the debate about energy security in Peru. Experts say the country needs to invest in infrastructure to prevent a single incident from paralyzing the system.
Measures under discussion include building a backup pipeline, installing a liquefied natural gas import terminal on the coast, and accelerating exploration of new gas fields.
“It’s incredible that Peru has natural gas — which is 90% cheaper than diesel and gasoline — and yet many regions still do not have access,” Cantuarias said.
For now, the government hopes that repairs to the pipeline will allow supply to be restored within about 14 days. However, even if the crisis is resolved quickly, Peru will remain dependent on fragile infrastructure despite possessing significant natural gas reserves.
Featured image: The Camisea gas field, in the department of Cusco
Image credit: Agencia Andina
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