Two requests to lower fuel prices await Sala IV ruling

November 15, 2016

The National Oil Refinery (RECOPE) requested two fuel price cuts in the past month and international prices of oil products this week fell to their lowest levels in the past three months, but motorists in Costa Rica are unlikely to benefit from those circumstances anytime soon.

The Public Services Regulatory Authority (ARESEP) suspended its evaluation of both of RECOPE’s requests, alleging that the Constitutional Chamber of the Supreme Court, or Sala IV, has barred ARESEP from acting on the request until the court rules on a complaint filed by the Costa Rican Chamber of Industries (CICR) against the price calculation methodology.

Both of RECOPE’s requests correspond to declines in international prices of oil. The first one filed in October asked for a ₡9 cut in the per-liter price of Diesel and of ₡2 in the price of Plus gasoline.

The second request filed Friday would have lowered per-liter prices an additional ₡21 for Super gasoline, ₡20 for Plus and in ₡16 for Diesel.

If approved by the regulatory agency, a liter of Diesel would have gone from ₡467 to ₡443 ($0.83-0.79); Super, from ₡579 to ₡560 ($1.03-1); and Plus, from ₡554 to ₡534 ($0.99-0.95).

Price settings on hold

ARESEP requested that Sala IV Justices explain why the agency is not allowed to set prices until the Sala IV ruling takes place. The agency is worried about a lengthy wait, since justices do not have a deadline to issue a ruling and could take months or even years to do it.

RECOPE this week also submitted an “urgent request” to the Sala IV to allow ARESEP’s to revisit fuel prices.

The request would allow the regulatory agency to proceed with pending price adjustments and also with future settings required for the purchase, import and distribution of fuels in the country, RECOPE said in a public statement.

ARESEP spokeswoman Carolina Mora said the delay “might cause strong differences” between local and international prices, and problems for RECOPE derived from budgeted costs they used to plan future purchases of fuels from international markets.

Mora said that RECOPE’s first request should have been resolved by Oct. 28, while the one filed last week should have been ready within the next two weeks and go into effect at the end of this month.

The appeal

The CICR brought the complaint before the Sala IV in response to a complaint filed by Social Christian Unity Party lawmaker Luis Vásquez in August. Vázquez asked the justices to overturn an executive decree continuing a subsidy included in the prices of gasoline and diesel since 2008 to maintain the price of cooking gas.

CICR Assistant Executive Director Carlos Montenegro said in a public statement that ARESEP’s decision to refrain from approving price settings is completely unfounded. He argues that according to the chamber’s legal advisers, ARESEP is misinterpreting the Sala IV orders.

“ARESEP’s legal interpretation is like that of a judge who stops trying people for their crimes just because someone challenged the country’s Penal Code,” Montenegro said.

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