Political "Spring" in Costa Rica

Outraged citizens are demanding the abolition of the state fuel distributor, which has a monopoly on the management and sale of all petroleum products.

Monday, September 28, 2015

EDITORIAL

Citizen demonstrations - unique because they are not specifically directed against the current government but against a state run company - are occuring at a time when news stories in Costa Rica are full of information about the privileges enjoyed by some sectors of the state bureaucracy, who earn the equivalent to twice and three times what is earned in the same roles in the private sector.

The march was organized through social networks, and hundreds of people gathered under the slogan "No More Recope," referring to the Costa Rican Oil Refinery, a state run company that has a monopoly on petroleum products.

The demonstration was held on a Sunday, as, being mostly private sector workers the, protesters were not able to be absent from their duties on weekdays as occurs when state officials demonstrate -missing their work without being penalized in their wages- against any measure that might cut the privileges they enjoy.

The protest reflects not only the high cost of fuel in Costa Rica -the highest price in the region - but also the privileged wages of employees at Recope, a cost which is transferred to the consumer as per officially calculation formulas used to determine the price of these fuels. For years Recope has not refined oil but finished products, despite keeping up to date the cost structure of labor for refining products.

Read: Outraged Street Protestors Demand Closure of Recope



More on this topic

A Monopoly That Loses Money

February 2016

The state run oil company in Costa Rica registered losses above $24 million during the first nine months of 2015, despite having the highest prices in the region.

In the first nine months of 2015 the Costa Rican Oil Refinery lost more than $24 million. The state run company, which has had a monopoly in refining and sale of fuels in Costa Rica for more than half a century, has payroll costs representing 56% of its total expenditure.

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.

Costa Rica Questions State Run Oil Company

July 2013

High fuel prices are seriously affecting the economy, making it necessary to consider removing the state monopoly in favor of free importation.

Jorge Guardia in an opinion piece in Nacion.com explains that the country must make two important decisions, the first is what to do with Recope and the second how to reduce fuel costs. He sets out three options for the first situation.

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