OPINION – Rico’s Digest – On Monday, vendors of contracts for crude oil were paying buyers to get it off their hands. After fumes settled Monday, the West Texas Intermediate (WTI) crude, a benchmark for Costa Rica, closed at US$-37.63 dollars for delivery in May.
This is like pulling up to a gasoline station and it paying you to fill your gas tank.
What does all this mean? Beats me, I am still trying to wrap my head around all of this. My economics teacher thought me to buy low sell high.
What does all this mean in Costa Rica? Not much, for we can be assured that the people who run Refinadora Costarricense de Petróleo (RECOPE) had the same teacher, buy low, sell high, with an added bonus, pilfer as much as you.
In light of yesterday, which really is not a factor, I proffer we will see higher gasoline prices very soon. Very soon.
The reason (excuse) for this is not important. What is important is to keep the prices high which translates into more money for the government and Recope, or both, to pilfer.
Despite having “refinery” in its name, the RECOPE is a net importer, that is, it does not import and refine, rather it imports finished fuels, stores, wastes money doing all sort of things, stores, sells it, (gasoline stations need to have their own truck to haul the stuff off from the plants), wastes some more money and keeps on going.
Then the central government has its hands in the process, placing a tax on every liter of fuel pumped by the pisteros Ino self serve in Costa Rica) into your tank.
The tax is almost one half of the final price of each liter pumped, allowing for a set gross profit for the seller, the gasoline stations, who have no control over the price to the consumer and only control over profits is to reduce operating costs and sell more volume.
From the RECOPE website, the breakdown of the ¢580 current consumer price of a liter of super gasoline, is ¢225 for RECOPE, ¢261 for taxes to the central government and ¢63 for the retailer. See here the breakdown for all fuels.
What incentive do RECOPE and central government have to reflect an international drop in prices at the pumps in Costa Rica? But they are sure quick to increase the international prices increase.
- Click here for The Costa Rican model for fuel prices to the consumer
- Click here to download (Excel file) a history of fuel prices in Costa Rica.
Know you know.
Thanks for listening.
Stay home. Stay safe. Stay healthy.
