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Costa Rica has most expensive gasoline, worst roads in Central America

June 2nd, 2014 (InsideCostaRica.com) Costa Rica has the highest fuel prices in Central America but has the worst roads, despite the fact that nearly one-third of the cost of fuel in the country is supposed to be used for road repairs and maintenance, according to a recent report.

 

According to a recent report by the International Monetary Fund (IMF), Costa Rica scored last place in Central America in its Ranking of Availability and Quality of Transport Infrastructure, this despite a heavy 30% tax placed on fuel which is supposed to support repairs and upkeep to the country’s roadways.  Even Costa Rica’s neighbor to the north – and the second-poorest country in the Western Hemisphere – Nicaragua, beats Costa Rica’s ranking.

 

Costa Rica’s fuel tax, which is provided to the National Roads Authority (CONAVI) for maintenance and upkeep of the country’s roadways, leads the country to have the highest fuel prices in the region.  For comparison purposes, a gallon of regular gasoline in Panama sells for $3.90, while in Costa Rica one can expect to pay $5.20.  Honduras has the second highest fuel prices in the region, where the same gallon of fuel will cost you $5.

 

At 30% of the cost of fuel, the tax is expected to bring in nearly 57 billion colones in 2014 (about $106 million USD) – funds that are intended to be used exclusively for the maintenance and repair of the country’s roadways.

 

In Costa Rica, the cost of fuel is determined by five variables:  the raw cost of the fuel at import (55%), fuel taxes (29%), transport costs (1%), RECOPE’s operating margin (8%), and service station markup (7%).  As a government entity, RECOPE’s operating margin is not intended to produce the institution a “profit,” but rather only cover its operating costs.

 

To put the cost of Costa Rica’s fuel tax on the pocketbooks of motorists into perspective, Costa Rica would go from having the most expensive fuel in the region to the cheapest fuel in the region if the tax were removed.

 

Adding to Costa Rica’s high fuel costs is the fact the country is unable to refine its own petroleum products.  Despite its name, the National Oil Refinery (RECOPE) does not refine petroleum at all – gasoline, diesel, and other fuels are imported refined and ready-made.

 

Despite the high prices (and bad roads), Costa Rica is consuming more oil products than ever.  Total sales have grown by more than 11% during the first quarter of this year compared to the same period in 2013, rising from 4,819,641 barrels during the first quarter of last year to 5,349,484 during the first quarter of 2014.

 

Some 70% of those imports are used for transportation, according to RECOPE.

 

Randall Murillo, executive director of the Costa Rican Chamber of Construction, believes the country’s road problems can’t be fixed through taxes alone.

 

Murillo believes many roadways need more than routine patching.  Murillo says many roads need a complete restructuring, expansion, or to simply be rebuilt from scratch.

 

Mismanagement also plays a part in the country’s road woes, according to engineer Roy Barrantes of the National Laboratory for Materials and Structural Models (LANAMME).  LANAMME engineers determined in 2013 that nearly 20% of the national road network is paved with unsuitable materials, causing CONAVI to waste nearly $26 million USD per year – about a quarter of all the fuel tax collected – on maintenance contracts that shouldn’t be necessary.

 

A 2012 report by LANAMME engineers found that just 35% of the country’s roadways were in “good” condition.

 

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  • Old Nam Warrior

    several years ago I witnessed newly paved roads from Cuidad Quesada to La Fortuna being dug up in 100′s of different locations(patch work) for no apparent reason..Absolutely nothing wrong with the road..I brought this to the attention of the Transito Police and they replied they couldn’t do anything…millions of colones down the drain…you can bet the government will be looking for handouts from China and the US to fix the roads..this is not only happening in San Carlos but throughout the country…usually the contractor is Solis

    ..this started right after Oscar was elected and continues to this day

    • toolman78

      I’ve seen the same thing several times as well. As if the work gets scheduled without evaluating the road’s condition beforehand. Meanwhile a section of the road between Sta. Cecilia and Upala is still just dirt road even though it get’s loads of heavy commercial traffic.

  • disgusted

    All of us loose with higher gasoline tax and poor roads. We pay it for everything in the grocery stores reflect the high transportation and tax. The winners are the CEO’s of recope with their bonuses and high paying jobs.

  • HONEST MAN

    Everyone knows that the roads are shit and and the Gas is over priced compared to every other place in the world. Costa Rica is corupt when it builds roads and bridges.

  • Ken Morris

    Add one more screw up to the IMF’s long list of same.

    Not to say that road construction/repairs are timely, well-engineered, and corruption free in Costa Rica, but sorry, no way is Costa Rica in worse shape than Nicaragua and probably other Central American countries.

    My bet is that Costa Rica simply has a lot more roads than the comparison countries, which raises the percentage of roads in poor shape. I mean, come on, to get from the Pacific to the Atlantic coasts of Nicaragua, you still basically have to fly because there are no roads.

    • Joe1047

      I do agree we may have many more roads here but I have also seen 4 different bridges in the same location from the earthquake in 2012 until today. That is in no way explicable or acceptable. I too have also seen perfectly fine parts of the road, ripped up and patched for no apparent reason the the patches last 5 months at best.

    • roberto

      After Chinchillla finishes kissing the Pope’s rings, is she still going to Canada? Have you heard anything about the murder of Kurt Heigis?

      • Ken Morris

        Sorry, I’ve heard nothing about either. I was in the US for a couple weeks.

  • Concerned Citizen

    Everybody should know that “Solis” is owned by Don Oscar. That’s his
    retirement package. The “Blue Bloods” of Costa Rica know no shame.

  • disgusted

    Timothy,

    Just observation. I notice the date changes at the top however, The same articles for a week! Is the ICR just a every now and then online articles???

    I am not sure what kind of staff you have or this is a one man operation. Also , we never heard any follow up to the gringo Kurt Heigis killed up in the mountains with his girlfriend, you said you would give us update, right??

    Regards
    Disgusted

    • http://insidecostarica.com/ Timothy Williams

      Hey amigo,

      We apologize for the sporadic publishing as of late – we continue to struggle financially which has impacted us significantly but we are continuing to try to push through it.

      Regarding Kurt Heigis, we have nothing additional to report at this time, the investigation seems to have hit a bit of a stand still but we are continuing to push for information.

      Best and thanks for reading ICR.

      • disgusted

        Timothy, Perfectly understandable .. Beside I getting this free anyway. I hope things work out better for ICR .. Your daily reader