In Central America, it is projected that the impact of the Covid-19 crisis on the business of retail sales of gasoline and oil products will be explained mainly by the expected drop in gasoline and diesel sales.
The "Information System for the Impact Analysis of covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
In order for a club soda or a restaurant in Costa Rica to obtain permission to use liquefied petroleum gas, the business must comply with the regulations that have been in effect since September and must then submit to the scrutiny of a certified specialist.
The 133 requirements to be met by restaurants and club soda are contained in the "General Regulations for the Regulation of Liquefied Petroleum Gas Supply."
In Costa Rica, Recope tenders the construction of the 14 and 15 loading stations for LPG dispatch in the Moin Plant.
Costa Rica Government Purchase 2019LN-000004-0016700102:
"Some scopes of the work:
-Construction of shed for sale of liquefied petroleum gas. It contemplates the metallic structure, foundations, roof covering, paintings, rain systems, etc.
Driven by the demand for LP gas, super gasoline and diesel, fuel consumption in 2018 reached 3.386 million liters, 2% more than that recorded in 2017.
Data from the Costa Rican Petroleum Refinery (Recope) detail that between 2017 and 2018 total fuel consumption in the Costa Rican market increased by 68 million liters, going from 3,318 million to 3,386 million liters.
In Costa Rica, the companies Rhone Investissements and Cervin Investissements are demanding the reinstatement of the administration of Gas National Zeta.
The struggle between Envangelina López and Miguel Zaragoza for control of the company Gas Zeta dates back to 2014, when a process of divorce and distribution of assets between both people began.
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.
The ICSID Arbitral Tribunal has ruled that the Costa Rican government did not cause damage to the company of Swiss capital, Gas Nacional Zeta, which sought damages of $75 million for disagreements over the LP gas tariff setting.
In 2013 the company of Swiss capital sued the Costa Rican government over disagreements on the tariff setting and safety requirements.
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.
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.
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%.
Internal problems in the larger of the two current distributors is restricting supply in the market and has forced the government to authorize the operation of other distributors.
In light of the legal dispute faced by the main gas distributors in the country, which have stopped providing the service temporarily, the Costa Rican government has announced that they are willing to authorize the operation of other distribution companies that meet the requirements established by law.
The formulas that determine the prices of products sold by the monopoly which is the state run oil company contain factors that create subsidies for gas and asphalt consumers at the expense of gasoline and diesel consumers.
An article published in Nacion.com reports on the results of an investigation into the calculation of consumer prices of automotive fuel, which states that since August 2008 changes have been put into effect to the formulas determined by the Regulatory Authority for Public Services (ARESEP), harming "... consumers of diesel and gasoline, who pay more per liter than the asphalt companies and gas users who save millions from the lower prices."
Private sector leaders have asked President Evo Morales to start negotiations for the import of gas at a cost of $500 thousand per year.
The Chairman of the Bolivian State Power Corporation, YPFB, along with the Ministry of Hydrocarbons would be responsible for negotiating supply to the Central American country, according to statements by the nation's President Evo Morales.
A recently released analysis of the fuel sector's regional distribution chain provides a comparison of the prices of gasoline, diesel, and LPG from 2002-2013.
By Mr. Raphael Vilagut-Vega:
Complete, detailed, timely and reliable statistics are essential for monitoring the energy situation in Central America which has not escaped from the energy crisis, both in terms of electricity and oil rates.
A bill in Congress could expand the state monopoly held by Recope to the LNG market.
Nacion.com reports: "The initiative was presented by five members of the Citizen Action Party (PAC by its initials in Spanish), with the intention of safeguarding the hydrocarbon, taking into account a legal loophole which could leave it outside of state control. If the law reform comes to fruition it would create a monopoly on liquefied natural gas, just as with other fuels. "