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Peru’s gas distributor Calidda proposes new tariffs for 2009-13

March 11, 2009

SAEM – Calidda, the gas-distributor operated by Ashmore Energy International (AEI), announced that it has asked energy regulator Osinergmin to approve tariff reductions during the 2009-13 period for  households and commercial establishments, while raising  industrial and vehicular gas tariffs.

In order to determine the tariffs, there are two types of gas consumers: the so-called “Tarifa Unica,” which uses under 20 bar pressure, and “Tarifas Otras Redes,” which use over 20 bar.

Tariff proposals by Calidda for “Tarifa Unica” (up to 20 bar) users:

(Consumer type/present tariff/proposed tariff/change)

Households………………………………$7.62/MMBTU $5.55/MMBTU -27%

Commercial establishments……….$7.22/MMBTU $6.39/MMBTU -12%

Industries Group C.…………………. $5.51/MMBTU $5.66/MMBTU +3%

Industries Group D…………………..$5.17/MMBTU $5.42/MMBTU +5%

Vehicular gas…………………………….$3.20/MMBTU $3.78/MMBTU +18%

Source: Osinergmin

Tariff proposals by Calidda for “Tarifas de Otras Redes” (over 20 bar) users:

(Consumer type/present tariff/proposed tariff/change)

Households…………………………….. $7.62/MMBTU $5.46/MMBTU -28%

Commercial establishments……… $7.22/MMBTU $6.64/MMBTU -8%

Industries Group C.…………………. $5.51/MMBTU $5.87/MMBTU +7%

Industries Group D.…………………..$5.17/MMBTU $5.62/MMBTU +9%

Vehicular gas…………………………….$3.20/MMBTU $3.49/MMBTU +9%

Source: Osinergmin

Osinergmin has the following thresholds for users:

Category A……………….up to 300cm/month

Category B………………301-17,500cm/month

Category C………………17,501-300,000cm/month

Category D………………300,001-900,000cm/month

Category E………………Over 900,000cm/month

As everyone knows, one of the problems in Peru has been low wellhead prices of $1-$2/MMBTU that has not only forced gas consumption to rocket in the country, but also encouraged power plants to waste gas inefficiently. This has been the main cause of power blackouts and bottlenecks in the Camisea-Lima gasline that appeared last year in Peru.

It appears that Peru is following the same ruinous path as gas-strapped Argentina did — keep tariffs unrealistically low in order to boost industry without taking into account if this is an incentive for energy majors to invest with gusto in upstream projects.

In Argentina it was a perilous mistake. Sooner or later, Peru will have to raise wellhead prices in order to avoid the mistakes that Argentina made.

The article can be reprinted as long as as the source is cited.

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