COSTA RICA NEWS — Despite the drop in the price of crude oil on international markets, in Costa Rica the drop in fuel prices for the second half of the year, has been less than in other countries.
Last July, the price of a litre of super gasoline hit record prices, exceeding ¢800 colones. Today, it is ¢59 colones less than in July.
However, in the United States, for example, the price at the pumps has dropped between 20% and 25%, while in Costa Rica it is only between 7% and 10%.
Why? About half of the price of gasoline corresponds to the cost of finished product, the rest on taxes, high costs of operating theRefinadora Costarricense de Petroleio (RECOPE), the state refinery that doesn’t refine anything and operating margins of gasoline stations.
In fact, only 49% of the price of a litre of super gasoline is for the product itself and based on international prices; another 33% is the for the “impuesto unico” (tax); 9% for RECOPE; and the remaining 9% is divided among gasoline stations, freight (transport), tariffs and subsidies for fishermen.
Since RECOPE doesn’t refine, it must buy the finished product.
Costa Rica is the only country in the region to have a “nationally set fuel price”, which does not vary by geographic area, compensating for freight costs of remote areas. That is to say, a litre of gasoline costs the same in the remote southern part of the country as in Guanacaste, in San José or Limón. Exactly the same at every gasoline station.
Maybe before the end of this year we can see a drop, as the state regulator on public prices and services (Aresep) reviewsfuel prices, that would take effect in December.
The current methodology applied to setting fuel prices is based on international market conditions for the 15 days prior to the second Friday of each month, explains Juan Quesada, head of Energy, at the Autoridad Reguladora de los Servicios Públicos (Aresep).
“If current levels (stock) are maintained and demand in the U.S. remains level, we might be in for a reduction in the rate for the next review … it is important to remember that the oil market is characterized by its constant changes,” said Quesada.
However, despite the decreases in the cost of the product, taxes continue to contribute to high prices in country. For example, this year we saw a tax increase of ¢13 colones for each litre of fuel. This is based on the Ministero de Hacienda (Ministry of Finance) adjusting for inflation over each previous quarter.
The last adjustment was last week, increasing fuel prices by 1.11%; hikingthe cost the price at the pumps for a litre of super from ¢755 to ¢757; regular from ¢717 to ¢720; and diesel went from ¢634 to ¢636.