Peruvian Government Reverses Course, Confirms Petroperú Privatization Decree
In a significant policy reversal, the administration of President José María Balcázar has confirmed that the decree allowing for the privatization and restructuring of the state-owned oil company, Petroperú, will remain in effect. The move comes despite previous indications from the president that he intended to scrap the measure.
Prime Minister Luis Arroyo officially ratified the decision on April 2, 2026, dismissing reports that the government would eliminate the emergency decree (DU 010-2025). This decree, originally approved during the administration of José Jerí, provides the legal framework for the company’s reorganization. According to recent reports, the government is now preparing a state guarantee—or “aval”—of up to $2.5 billion to help the oil company secure third-party financing to combat a severe liquidity crisis.
The decision marks a sharp turn for President Balcázar, who had previously signed a bill to derogate the decree and had reiterated his intention to do so in meetings with labor unions. However, as detailed by Infobae, the administration has now reaffirmed the privatization path while ensuring that the necessary financial support will not be drawn from the public treasury or the Ministry of Economy and Finance (MEF).
Prime Minister Arroyo emphasized that there will be “no turning back” on the application of the decree. In an interview with Exitosa, he stated that “Petroperú is being reflotated in a different way,” noting that a definitive plan regarding the company’s short-term management will be announced in the coming days.
The Prime Minister defended the strategic importance of the state oil company, particularly its role in ensuring fuel supplies reach remote areas of the country where private sector competition is limited. This strategic necessity appears to be driving the government’s effort to restructure the entity through state guarantees rather than direct cash injections.
The turmoil surrounding the company is further compounded by leadership scandals. The newly appointed president of Petroperú is currently facing investigations related to the Odebrecht case and has a pending complaint for sexual harassment.
The government’s sudden shift underscores the urgency of the liquidity crisis facing the state oil company, which experts suggest has already seen critical delays in its rescue efforts. As reported by El Comercio, the administration is now focused on a restructuring path that balances state oversight with private investment.
