Fuels As a Fiscal Tool

In Costa Rica the cost that petroleum and its derivatives represent for the productive activities is an example of the distortions caused by the State in the prices of a vital input for the economy.

Wednesday, February 18, 2015

From a statement issued by the Chamber of Industries of Costa Rica (ICRC):

The Chamber of Industries of Costa Rica has questioned the increase requested by RECOPE on February 13. "In our country fuel prices have still not fallen in the proportion that they have dropped internationally and now RECOPE has announced an increase, not because their inventories have changed price, but because of the international reference price," said Enrique Egloff.

The Chamber of Industry said that from December 2013 to December 2014, the price decrease of bunker fuel in Guatemala was of 23.82%, while in Costa Rica it was only 9.77%, leaving our country lagging behind in terms of price decreases. It was not until January 2015 that Costa Rica began implementing decreases. Furthermore, despite the fall in the price of bunker fuel in January, it is still more expensive in Costa Rica than in Guatemala (see box on rate of change in bunker prices).



More on this topic

The High Cost of Over-Regulation

January 2019

It is estimated that the lack of competition among wholesale suppliers and the over-regulation of fuel prices generate an estimated annual cost of about $830 million to the Costa Rican society.

According to a study carried out as part of Costa Rica's accession to the Organization for Economic Cooperation and Development (OECD), over-regulation hinders competition between service stations and does not allow consumers to take advantage of lower prices.

Costa Rica: Subsidy for Industrial Fuels

August 2016

Industrialists in Costa Rica are opposed to the appeal lodged by deputies against the presidential decree that prevented the rise of 72% in the price of LP gas and 35% in bunker fuel.

From a statement issued by the Chamber of Industries of Costa Rica:

Costa Rica: Oil and Diesel Will Keep Subsidizing Gas

January 2016

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.

Costa Rica: More Fuel Surcharges

November 2015

The State fuel distributor wants to include the cost of refining carried out in the country in fuel prices, even though it has not refined anything since 2011.

From a statement issued by the Chamber of Industries of Costa Rica:

• RECOPE wants to include the cost of refining carried out in the country in with fuel prices, even though it has not refined anything since 2011.

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