Privileges increase prices of gasoline

A savings fund, housing loans, expenses for recreation and bonuses, scholarships for children, and restaurant services for employees of the state and the monopolist hydrocarbons distributor of Costa Rica, are financed through the prices paid by consumers, even by the poorest.

Tuesday, October 31, 2017

Jorge Cobas González
Founding Director of CentralAmericaData.COM.

Imagine that at the supermarket checkout, instead of asking if you want to collaborate with the Children's Hospital fund, or help buy wheelchairs for a nursing home, you are informed that a percentage of your payment will be added to the final price you will pay in order to fund privileges such as restaurant services or recreation expenses, for the employees of a state company, where they already receive salaries well above those paid in private companies. You would probably abandon your purchase and leave indignantly for the countryside to buy the potatoes, lettuce, eggs and milk directly from producers.

Imagine now that you are in Costa Rica and you need to refuel your car. At the service station you will be informed that as part of the price you pay, you will be contributing 5 cents per liter of fuel, to finance savings funds, housing loans, expenses for recreation and bonuses, scholarships for children, and restaurant services, for state officials and employees of the hydrocarbons distributor monopoly of Costa Rica, RECOPE.  Can you withdraw indignantly to buy the fuel elsewhere?  NO, YOU CANNOT. Because that state company has a monopoly on the distribution of hydrocarbons, and nobody else is allowed to sell them.

It doesnt matter if your vehicle is an expensive luxury car or a small motorcycle, all fuel consumers must contribute to paying for the privileges granted to RECOPE officials, privileges approved by the Supreme Court of Justice of Costa Rica, which in all its rulings are based on the concept of "acquired rights", a concept so distorted from its origin as a formal premise of justice, which today serves to maintain state bureaucrats as if they are members of a perpetual aristocracy, to the detriment of those who do not belong to the club.

The concessions and privileges granted to officials of the institutions and companies run by the State, by complacent leaders in the use of the money of all the citizens, must be revoked, because they discriminate against the rest of the citizens, and because they are a distorting factor of the economy, as is clear in the case of fuel prices.

See: Users will pay more expensive fuel from February due to Recope's Collective Convention  (in Spanish)

See: "Acquired Rights" or The Garden of Fools 

More on this topic

Against the Privileges of the Few

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The union of private companies has submitted a constitutional challenge against the Collective Bargaining Agreement of the state run refinery Recope.

From a statement issued by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP):

Costa Rica Becomes Less Competitive

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The Supreme Court has ordered the cost of giving bonuses to employees of the state run monopolistic distributor to be incorporated into fuel prices.


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Negotiating with Someone else's Money is Easy

July 2014

The "negotiators" for the Government of Costa Rica have suggested "as a starting point" a proposal to increase the salaries of state workers which was met with "satisfaction" by the public employee unions.  


Imagine you are responsible to the shareholders of a company that is in a very bad financial position, with costs consistently rising above income, meaning that the losses continually mount up and threaten the stability of the corporation.

Acquired Rights: Absurd Economics and Institutionalized Injustice

June 2014

In the public sector in Costa Rica collective agreements have become synonymous with illegal privileges and economic dysfunction, under the concept that acquired rights are unassailable.


If a private sector company ceases to be competitive, no matter for what reason, it will eventually fall into bankruptcy and its employees will lose their jobs, no matter how many agreements they have signed with their employer.

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