Costa Rica: Hikes of up to 72% on Industrial Fuels
Increases up to 72% are expected in the price of gas and 35% in bunker fuel if a proposal put forward by ARESEP to reduce the price of gasoline and diesel by 2% is successful.
Tuesday, December 8, 2015
From a statement issued by the Chamber of Industries of Costa Rica:
Monday December 7, 2015. While industrial companies are making significant efforts to increase production and create jobs, the ARESEP has announced that in order to reduce gasoline and diesel by 2% it will increase the cost of bunker fuel by 35% and by the cost of Petroleum liquid gas 72%.
Enrique Egloff, President of the Chamber of Industries, said the cost of reducing gasoline by 2% will mean a sacrifice in production costs for industrialists "encouraging consumption rather than production will bring a high cost because it will bankrupt industrial companies that use bunker fuel and liquefied petroleum gas (LPG), which are industrial fuels used for operating boilers, furnaces, burners, etc.
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The Constitutional Chamber has rejected the appeal filed by deputies against the presidential decree that prevented a 72% increase in LP gas prices and 35% in bunker fuel.
From a statement issued by the Chamber of Industry:
"The Chamber of Industries of Costa Rica has welcomed the rejection by the Constitutional Chamber of the case of unconstitutionality brought by the Deputy of the PUSC Luis Vásquez and other Deputies against the Sectoral Policy of the Executive Power regarding the prices of industrial fuels, corresponding to Executive Decree 39437 of the MINAE, signed in January of last year.This defeats once more the specter of an excessive and disproportionate increase in fuel prices which our industry uses to compete in the world and with the world.
Concern over the serious impact on the productive sector of a 72% increase in gas prices has faded, while accusations of inefficiency and a monopolistic state oil company still persist.
Although the ARESEP is expecting to submit to a public hearing the new pricing methodology which would eliminate the subsidy from the cost of Liquefied Petroleum Gas (LPG), asphalt and bunker fuel, and increase the cost of a 25 pound cylinder from ¢ 6,410 to ¢8,470, the Government of the Republic has decreed a new sector policy for prices, in order to avoid the increases proposed by the regulator.
A pilot project is being prepared for the distribution and retail sale of liquefied petroleum gas, consumption of which increased by 19.5% between January and October of 2012.
"Giving up using wood and stoves in homes is helping to reduce the level of pollution in the country, but it has also allowed Liquefied Petroleum Gas (LPG) to gain ground as a product as a result of its use in household kitchens, eateries and restaurants", noted an article in Laprensa.com.ni.
The Venezuelan-owned company Energy 304 will distribute Liquefied Petroleum Gas (LPG) for domestic use in the country.
The distribution of LPG will be done through the stores BANASUPRO (National Commodity Supplier). The company 304 Energy will provide the investment to adapt local product suppliers.
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