Gas pipeline rupture causes nationwide energy crisis in Peru

A gas pipeline rupture in Peru's Cusco region has triggered the country’s worst energy crisis in more than two decades, affecting fuel supply, transportation, and electricity generation in several areas of the country.

The rupture occurred on March 1 at kilometer 43 of the Camisea pipeline in Peru’s Megantoni district forced the partial suspension of natural gas transport to the Peruvian coast.

The causes of the damage are still under investigation, according to Osinergmin, a regulatory and supervisory body for Peru’s energy sector.

Because many private cars and taxis in Peru rely on natural gas as fuel, having converted from more costly gasoline and diesel, the most visible impact of the gas shortage is being felt on the streets.

"Many gas stations in different areas have shut down. There is no service, fuel, natural gas, gasoline, or diesel," said one taxi driver.

"Fuel was nearly impossible to find throughout Lima. I've driven around but haven't found any. This gas station still has some, but the prices are high," said another.

"More than 350,000 taxi drivers, along with small vehicles and motorcycle taxis, are unable to access natural gas at this time," said Aurelio Ochoa Alencastre, interim president of Osinergmin.

The pipeline rupture has also devastated Peru’s electricity supply, 40 percent of which is dependent on natural gas, forcing power cuts at energy-intensive industrial operations, with around 1,000 medium to large enterprises suspending operations as a result.

To reduce demands on the restricted power supply, all primary and secondary schools and some higher education institutions in Lima and Callao moved to remote teaching on Monday, with many public sector workers also ordered to work from home until further notice.

Gas pipeline rupture causes nationwide energy crisis in Peru

Soaring oil prices triggered by escalating tensions in the Middle East have heightened U.S. inflation pressures, with analysts warning that households face hundreds of dollars in extra costs if crude climbs further.

Data released on Tuesday by the American Automobile Association (AAA) showed that the national average price of regular gasoline in the United States has risen 18.64 percent compared with Feb. 26. The AAA data also indicated that the national average price of diesel on Tuesday was up 22.85 percent from a week earlier.

Mark Zandi, chief economist at global ratings agency Moody's, warned that U.S. consumers are being threatened by a sharp rise in fuel prices. He said that if international oil prices climb by another 10 U.S. dollars per barrel, annual spending for an average U.S. household would increase by about 450 dollars.

Zandi noted that a surge in oil prices would intensify inflationary pressure in the United States, eroding consumers' purchasing power and weighing on consumption, economic growth, and employment.

Tensions sharply escalated across the Middle East on Feb 28 when the United States and Israel launched large-scale joint airstrikes on Iran. The Iranian side has responded with multiple waves of missile and drone attacks targeting Israel and U.S. assets across the region, hitting many countries in the Gulf.

Escalating Middle East tensions drive up energy prices, squeezing US consumers