Saturday 28 May 2022

Gasoline increase will although RECOPE did not ask for it

Aresep clashes with Recope for lack of 'transparency' with fuel rates. Regulatory authority accuses Recope of not wanting to show its face for amounts of adjustments.

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28 May 2022 - At The Banks - BCCR

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QCOSTARICA – A new increase in the price in gasoline is expected to be approved in the coming days, as the regulatory authority, the Autoridad Reguladora de los Servicios Públicos (ARESEP), will process a new adjustment with the need for the Refinadora Costarricense de Petróleo (RECOPE), the Costa Rican refinery that refines nothing, requesting it.

Consumers are the most likely loser in the clash between RECOPE and ARESEP

At the moment, it is unknown how much the increase would be, since Juan Manuel Quesada, executive president of RECOPE, left the decision to increase fuel, and by how much, or not to the ARESEP.

“This week RECOPE will not submit a request for an increase. The law establishes that ARESEP is the competent entity to set the rates. What corresponds to us is to send the technical and statistical information to ARESEP so that it is that entity that determines the new rates for gasoline and other fuels,” said Quesada.

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This unleashed an unprecedented dispute between the two State entities.

The ARESEP said this is a lack of “transparency” on the part of the RECOPE, not wanting to face the country for high gasoline prices.

“The decision made by RECOPE is to avoid public opinion, as it has always done in a transparent manner, the amount of the monthly adjustment that must be applied,” the ARESEP said in a statement issued less 24 hours after the new executive president of RECOPE, announced his decision.

The former head of the ARESEP Dennis Meléndez, and the former executive president of RECOPE, Alejandro Muñoz, consider that the RECOPE’s decision is a “move”, or a “strategy” to not be held responsible before public opinion for the increases in fuels.

Muñoz, who presided over RECOPE in the Government of Carlos Alvarado, declared that he was proposed to apply the same thing that Quesada is doing today, but, internally, they advised him not to do it “for transparency.”

“Shoemaker to your shoes! With respect to the institutionality of the country, it is important that ARESEP assume its functions; meanwhile, RECOPE will efficiently provide the service entrusted to us, so that Aresep, according to the Law, will set fuel prices,” the state refinery said in a statement.

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In accordance with the previous methodology, on the second Friday of each month, RECOPE presented financial data to the ARESEP to justify the adjustment in the cost of fuel. At the end of the document, it included a box with a tariff proposal. After an analysis, the regulatory body defined the new amounts at the end of the month.

This all changed on Friday, May 13. RECOPE stopped presenting that box and sent separate statistical tables, cost boxes and graphs for the ARESEP to analyze and determine prices.

“RECOPE had been presenting extraordinary requests in a transparent manner, for a very simple reason: the Regulatory Authority does not co-manage and, as far as fuel imports are concerned, the required information is exclusively held by RECOPE,” shot back the ARESEP.

Today, the cost of a liter of super gasoline is ¢958; regular ¢933 and diesel ¢907. This after a an increase on Wednesday of the government’s fuel tax.

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Will ¢1,000 colones per liter be a reality?

Hopefully, it won’t happen, but the chances of that are very slim. If the trend of the past five consecutive increases are any indication, we most likely be ver close to that mark.

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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