Fuel distribution: Peru approves international loan request for Petroperú

Petroperu approved a request on Monday for up to $2 billion from international banks for the national oil company Petroperu, in order to ensure fuel distribution in the country, the government announced.

Petroperu has been facing financial difficulties for several years. As the main Peruvian state-owned company, it specializes in the transportation, refining, distribution, and commercialization of oil and its derivatives.

Peru’s Prime Minister, Luis Arroyo, assured that the funds would come exclusively from international private banks and not the state, denying that it was a public bailout.

“We have approved a new model to ensure the continuity of Petroperu’s operations and guarantee fuel supply on a national scale,” Mr. Arroyo said during a press conference.

Established in 1969, Petroperu grants operating concessions to private companies. No government has attempted to privatize it so far, due to concerns about social reactions.

Peru is an oil importer, with a small production of around 45,000 barrels per day, compared to a demand of over 250,000 barrels.

In December 2023, the company restarted its refinery, which had been closed for over four years for modernization.

The construction of Peru’s largest refinery, located in Talara (north), was initially estimated to cost $3.5 billion, but the final cost exceeded $5 billion.

The refinery currently processes about 95,000 barrels of oil per day, compared to 60,000 before the upgrades.