Costa Rica has the most expensive gasoline and the worst roads in the Central America. But it shouldn’t be so, since 29% of the taxes on fuel goes to the Consejo Nacional de Vialidad (Conavi), the government agency responsible for the country’s road network.
The almost one third tax contribution translated into real numbers represents ¢56.7 billion colones (US$105 million dollars) for this year, according to the agency’s 2014 budget projections.
When we compare gasoline prices (per US gallon) in Costa Rica we pay US$5.20 for regular, while in Panama the same gallon costs US$3.90, in Honduras, US$5.
According to the World Economic Forum Global Enabling Trade Report 2014, Costa Rica scored last place in Central America in the ranking of Availability and Quality of Transport Infrastructure. Panama, Guatemala, El Salvador and even Nicaragua, the poorest country in the Americas, scored higher.
In the past decade we have seen significant price increases in fuel prices. According to the Autoridad Reguladora de los Servicios Públicos (Aresep), the government regulator of public services, the current price of fuel is one of the highest.
In 2008, the price of a litre of regular gasoline hit a high of ¢726, in 2012 it hit a hight of ¢786. The current price is ¢760. The Aresep recently approved and increase that will take effect this week.
Carolina Mora, spokesperson for the Aresep, explained that the latest increase is not due to increased demand, but, to the dollar exchange. Mora added that, if we were to remove the taxes on gasoline, the real price is ¢530 colones a litre and the lowest in Cental America.
The final price of a litre of gasoline in Costa Rica is made up of five elements: fuel cost (56%), taxes (29%), transport costs (1%), Recope (8%) and gasoline retailer margin (7%).
The Refinadora Costarricense de Petroleo (Recope) is the only importer of fuels in the country. And despite it name, refinadora (refinery), refining is not part of its operation.
Recope imports all the fuel that is distributed and consumed in the country, but all the fuel is for transportation. According to Recope, 30% of its imports is used for the generation of electricity.
Back to the poor roads. According to a 2012 report by LANAMME, the Laboratorio Nacional de Materiales y Modelos Estructurales – National Laboratory for Materials and Structural Models, only 35% of the country roads are in good condition, 53% in a “regular” state of repair (which quickly turn to bad, but can be maintained with regular intervention), the rest 12% is in poor condition.
The LANAMME blames the poor condition of the road network to mismanagement. The LANAMME engineers determined that in 2013 some 20% of the road network is paved with unsuitable materials, that converts into some ¢13 billion colones in waste through maintenance contracts by the Conavi.