Peru DS 002-2026-EM: Six-Tier Natural Gas Rationing Priority Order Under Emergency Mechanism

Mechanism

Decreto Supremo N° 002-2026-EM modifies the 2018 Gas Rationing Mechanism regulation to establish a legally-binding six-tier priority order for gas allocation:

1. Tier 1 (highest): Residential consumers and regulated commercial users 2. Tier 2: Natural gas vehicle (GNV) stations and public transport (urban CNG fleets) 3. Tier 3: Regulated industrial consumers with daily consumption below 20,000 m³/day 4. Tier 4: Regulated industrial consumers with daily consumption at or above 20,000 m³/day 5. Tier 5: Independent consumers with firm supply/transport contracts 6. Tier 6: Independent consumers with interruptible contracts (lowest priority)

Tiers 1 and 2 receive direct allocation ahead of any cuts. Tiers 3–6 receive proportional rationing based on each consumer's average consumption during the 7 calendar days immediately preceding the emergency declaration.

A DGH exception clause allows the Directorate General of Hydrocarbons to override the hierarchy for: industries unable to source alternative fuels, hospitals and health-sector suppliers, fuel production agents (refineries, petrochemicals), and entities critical to national security or public health.

The decree also imposes binding operational obligations on:

• Natural-gas producers (optimise field production, minimise upstream curtailments)
• Pipeline transport concessionaires (optimise transmission capacity, priority dispatch)
• Distribution concessionaires (enforce tier-based allocation to end-consumers)
• LNG plant operators (manage liquefaction/regasification to support grid balance)

Osinergmin, the energy regulator, is granted authority to issue temporary exemptions from safety and commercialisation compliance obligations for the emergency period.

Trigger event: March 2026 Camisea pipeline rupture

The decree was issued in direct response to the 2 March 2026 rupture in TGP's main Camisea gas pipeline in the Megantini district (Cusco), which serves as the backbone of Peru's gas supply (~95% of national gas production transits via this infrastructure). The rupture:

• Reduced pipeline throughput to approximately 9–10% of normal operating capacity
• Cut supply to all thermal power plants in Lima, raising electricity-generation costs
• Forced Cálidda (Lima/Callao distributor) to cut gas to 850 industrial users and halt

delivery to all thermal IPPs and ~150 CNG service stations

• Halted LPG production by Pluspetrol (Camisea operator), accounting for approximately

70% of Peru's LPG supply

A 14-day energy emergency was declared from 2–14 March 2026. TGP restored pipeline operations by the end of the emergency period.

Downstream implications

• Electricity-generation fuel switching: During any gas emergency, thermal IPPs

(Enel Generación Perú, Engie Energía Perú, Kallpa Generación, Fenix Power) are pushed to Tier 4–5, creating pricing pressure and potential fuel-switching to residual oil or diesel as backup — with material cost-pass-through under regulated tariff frameworks.

• Industrial cost volatility: Large-volume regulated industrial users (Tier 4) and

independent contract holders (Tiers 5–6) face rationing risk in future emergencies, requiring investment in backup fuel storage or demand-response infrastructure.

• LNG export contractual risk: Peru LNG/Pampa Melchorita's LNG export operations

(targeting Atlantic Basin customers) sit at or below Tier 5–6; any emergency activation creates contractual force-majeure exposure on export commitments.

• Infrastructure investment signal: The 2026 Megantini rupture and this decree

reinforce the imperative for TGP pipeline redundancy and Cálidda/Quavii emergency storage investment — structurally comparable to Argentina's Plan Gas.Ar architecture and Bolivia's YPFB emergency-supply-priority framework.

Open questions

• Will MINEM extend the decree's rationing architecture to cover LPG (currently separate

regulatory framework under Osinergmin's liquid-fuels rules)?

• Is a pipeline redundancy obligation or mandatory strategic reserve requirement for

distributors being considered as a follow-on instrument?

• How will the DGH exception clause be operationalised for hospital/healthcare suppliers —

is a pre-registration or priority-designation mechanism pending?