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LIMA — Peruvian President Alan Garcia has accepted the resignation of Prime Minister Jorge del Castillo over a widening corruption scandal and will reshuffle his entire cabinet, Mr. del Castillo said on Friday.
Mr. Garcia had faced calls from opposition leaders to shake up his cabinet after audio tapes emerged that linked members of his APRA party to a plan to steer lucrative petroleum contracts to favoured bidders.
Mr. Garcia, a staunch supporter of free markets and foreign investment, has seen his approval rating fall to a record low of 19 per cent despite surging economic growth.
"The president has decided to accept the collective resignation of our cabinet and reshuffle it under the constitution to create a new one," said Mr. del Castillo, who was flanked by other cabinet members and Mr. Garcia.
Mr. del Castillo, Mr. Garcia's right-hand man, was mentioned in the taped conversations as someone who would provide favours in a plan to rig auctions of oil and gas concessions. Mr. del Castillo also had lengthy meetings with APRA party members who were working as lobbyists and involved in the auctions, but he has denied wrongdoing.
The former mines and energy minister, Juan Valdivia, already has been forced to quit, along with two other energy officials.
Finance Minister Luis Valdivieso, a former IMF official who recently joined Mr. Garcia's administration, is expected to stay on.
Peru's Congress has voted to investigate all oil and gas concessions granted since 2006, and will scrutinize dozens of contracts signed between Peru and foreign oil companies for signs of irregularities in the country's growing petroleum sector.
