San José, Costa Rica, since 1956
Fuel

Costa Rica's oil refinery wants to increase fuel prices – again

Higher fuel prices approved last Friday haven’t even gone into effect yet, but that hasn’t stopped the National Oil Refinery (RECOPE) from seeking a new hike of ₡9 in the per-liter prices of gasoline and diesel.

The refinery submitted a new request on Monday at 5 p.m., citing increases in operating costs, Public Services Regulatory Agency (ARESEP) spokeswoman Carolina Mora said.

Before issuing a ruling ARESEP’s technical staff will evaluate the request for the next two weeks, and then it will be submitted for public consultation to give citizens the opportunity to oppose it.

New per-liter prices approved last Friday are expected to take effect later this week following publication in the official newspaper La Gaceta. ARESEP approved a ₡43 increase in the price of “Super” gasoline, ₡35 for “Plus” gasoline and of ₡36 for diesel.

A liter of Super will increase from ₡600 to ₡643 ($1.12-1.20); Plus will increase from ₡575 to ₡610 ($1.07-1.13); and diesel from ₡478 to ₡514 ($0.89-0.96).

The latest increases were approved after taking into consideration a reduction in reserves of finished products and an increased demand in the United States, ARESEP reported.

If approved the latest higher prices would become the fifth consecutive hike this year following eight decreases approved between mid-2014 and early 2015.

Contact L. Arias at larias@ticotimes.net

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Dan Gibson

A friend of mine works for the company — contracted to sell gasoline to Costa Rica — not long ago he was in Costa Rica — told me — for a couple years — the contract called for a gallon of gasoline to be transported and placed into the Recope tanks in San Jose for $1.37 — so my question would be — if this is correct — why were the Costa Rican citizens paying $5.75 per gallon for that time??? And now — that oil is at a forty year low — are the powers to be asking for another raise ?????

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Marvelous Marv

The spot price in NY for gasoline is $1.96. It has to be shipped to CR, The national oil company is refining petroleum which is a value add. So the first question is how does the pre-tax cost of gas refined in CR compare to the Spot price of gasoline, landed duty paid.

The CR government levies a unified tax of about 240 colones per liter of gas. That’s close to 50%. You can call it graft but its an impuesto unico. It’s mostly to go for road maintenance. LOL

I think the government should eliminate the duty on any all electric vehicle so as to get them on the road. ICE should offer a reduced rate for charging. Plug-in hybrids that have a decent range should have a big reduction as well. I think hybrids get some kind of break now, but they still use a lot of gas and I don’t see the point. Reduce the amount of hydrocarbon consumption for transportation is the best way to achieve carbon neutrality and reducing imports.

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patico

RECOPE does not refine anything, so you should not include a refining value-add component in your calculations. Yes, I know it has the word “refinery” in its name in Spanish, but it does not refine anything. It is nothing more than a gasoline distributor with a monopoly on the local market that has been ripping Costa Ricans off for decades. We once had foreign refineries like Texaco, Chevron and others, but in the 70’s they were all kicked out and the “refinery” business was nationalized – meaning that it was destroyed and replaced with a government -run gasoline distributor that does nothing except bilk us all.

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Marvelous Marv

Thanks for the clarification. The point is that if wholesale gas is 500 colones per liter and taxes are another 250 colones or so, there are the added costs of logistics and overhead. The latter is probably where the problem lies. In general, I think it is a bad idea for any government to run a business that can be run by private industry, provided that there is adequate competition to ensure a fair market. I don’t know if there are enough assets to provide such competition. However, a monopoly in private hands is worse than one in government hands. It’s shameful though that a government owned business is not operated in the public interest, which is it’s primary purpose.Clearly, a shake up is needed in all government owned industries to ensure the public is best served, not the operators or politicians.

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Marvelous Marv

My bad, wholesale gas would be about 250 colones per liter.

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SDPUS

Um. Probably for the EXACT same reason Eduardo Li was arrested in Switzerland today. Institutional corruption of the powers who be…a better question is what is the top Prosecutor Jorge Chavarria doing?

….many of these people involved in these scandals and the people who are suppose to be investigating them in Costa Rica hope to soon retire (w/ enormous pensions), and then they can pass the issues on, with the hope that eventually the issues will fade away.

That is the circle of corruption that currently exists in the government domain of Costa Rica. It will take strong independent leaders and the active will of the people to ensure they do not get away with it.

The outlying question is: what will the national media do? Will they objectively report or will they continue to cater to those who provide them $$$$. When the media is bought and paid for, reality is easily misrepresented and/or distorted.

Just wait to you see the details of this FIFA corruption case. This case will blow the doors off of institutionalized corruption. And hopefully many more of these high profile cases come to follow…

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