Only a few weeks ago President Luis Guillermo Solís appeared outraged at Recope’s price hike request and its approval by the regulatory board.
Responding to the President’s outrage, the regulatory, run by civil servants, gave the top civil servant (the President) a few suggestions on how to cut fuel prices in the country, they included cutting taxes on fuel and Recope to trim its costs.
I admit I believed the President really had the intention of the people in mind and was serious about cutting fuel prices. And for a split second even believed that he would perform the magic.
He didn’t. And we learn that the government, Mr. Solís’ government wants a little more of the gasoline price pie, the ministry of Finance (Hacienda in Spanish, yes, I know Hacienda to North Americans means housing) announcing an increase of ¢5 colones in fuel prices caused solely that is strictly tax.
And all done by decree, some legal beagle at government house printing out a form, the president signing it and published in the legal newsletter.
Mr. Solís admitted that he has control over Recope. Now it appears he has no control over Hacienda either.
Here is the reality of gasoline prices in Costa Rica:
- Recope, the state refinery that doesn’t refine anything, buys finished product to resell to gasoline stations across the country.
- Recope establishes a consumer price, goes to the regulatory body, which after public hearings and the like, rubber stamps the approval.
- Recope is a state entity, handing over its after tax profits to the government.
- Gasoline stations are mandated on the final price to the consumer and their profit margin.
- Recope uses the price of crude on international market to define the final price to the consumer, no relation to the actual purchase of the product
- The government collects billions of colones in sales tax on retail gasoline sales, income tax on Recope and a”impuesto unico” a special tax on fuel prices.
Did I miss anything?