The Autoridad Reguladora de los Servicios Públicos (ARESEP), the regulator of public prices, including gasoline, says it has the answer to reduce the price at pumps: the government eliminate the tax.

That is the proposal by Dennis Meléndez, Regulador General, to president Luis Guillermo Solís

The removal of tax on gasoline says Meléndez would reduce the cost at the pump by some ¢200 colones, which is about 30% of the total price that customers pay when filling their tank.

However, the Regulador General recognizes that eliminating the tax would broaden the tax gap that currently existing and puts at risk road maintenance,  improvement  and construction projects.

The other proposal by the ARESEP is for the state refinery, the Refinadora Costarricense de Petróleo (Recope), to reduce its opeating costs.

Meléndez says that for every 10% reduction by Recope would mean a decrease of ¢5 colones per litre at the pumps.

In its proposal to the President, Meléndez suggests a re-organization of the al Recope internal processes, as well as remove the obligation on the state entity to pay income on profits.

The recommendations made Monday comes days after Solís demanded of the ARESEP an explanation of the methodology its uses to fix gasoline prices.

Currently, while the majority of Costa Ricans are fixated on the World Cup efforts of the national soccer team, the RECOPE has made a request for a ¢28 colones increase in the price of gasoline, which, if and when approved, would raise the cost of a litre of super to ¢816 colones.

The request is in the public hearing process which closes on June 26.

The ARESEP, in its letter to the President, says currently 63% of the price of a litre of diesel and 55% of regular and super gasoline is based on the international price of crude oil and the dollar exchange rate.

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