600,000 new natural gas connections for households in Lima



Caros Herrera (Photo: El Comercio)

Carlos Herrera Descalzi, Peru’s next Minister of Energy and Mining, has stated that there would be about 600,000 new connections of natural gas in Lima households, in the next five years.

"The implementation of natural gas connections in homes has been very low, there are only 50,000, so the goal is to increase that by ten or twelve times, 500 thousand or 600 thousand household connections in five years," he told Andina news agency.

He explained that in the past weeks the transition committee for the Ministry of Energy and Mining (MEM) has been in contact with Cálidda Gas Natural del Perú, a company that is in charge of the natural gas distribution system in Lima and Callao.

These conversations were to take stock of the amount of natural gas and to evaluate possible alternatives in order to increase household connections.

"It is a coincidence that those with higher consumption of natural gas somehow take over costs that would accrue to those who consume less," he declared.

Herrera argued that the industry should participate more in common costs, in order to ease rates for residential consumers.

He stated that he did not plan on applying a cross-subsidy, but simply a cost allocation methodology, as the issue was about shared networks.

"We need to consider that the benefit for older consumers is very large. Then depending on the method, which need not necessarily be a subsidy, the costs can be spread in terms of benefit," he said.

He noted that one possibility would be that big industries would pay a little more to help the shared infrastructure, so that infrastructure costs for the residential consumers would be lower.