Recope Hoarding Fuel And
Cash To Face Crisis
The Refinadora
Costarricense de
Petróleo (Recope) is
hoarding fuel and money
to face an economic
crisis in 2009, going
into the new year with
3.2 million barrels of
fuel, equivalent to the
average consumption for
two months.
José León Desanti,
Recope president, said
this is the highest
level of inventory the
state institution has
ever held.
Desanti explained that
the move is based on the
fear that due to the low
prices for crude oil on
international markets,
producing countries may
slow down or close
production, which could
mean a shortage.
In addition to hoarding
fuel, Desanti said that
Recope is making
provisions for cash to
work with, holding some
us$73 million dollars in
its coffers.
Recope spends us$175
million dollars a month
on average to purchase
fuel. The cash reserve
means it can work with
at least 15 days, which
is insufficient, thus
the institution is
looking ways to build
cash reserves to equal
at least one month of
purchases.
The policy is ensure
that the country can be
supplied with fuel and
that the Recope has the
cash to make purchases
in the event of worse
global economic
conditions.
Earlier this year Recope
faced severe economic
challenges with the
price of a barrel of
crude reaching the
us$150 mark, forcing it
to have to borrow to
make purchases and
keeping reserves low.
Carlos Quesada, Recope's
financial manager, said
that the last of the
us$100 million dollar
debt by the institution
was paid in September,
one reason for continued
high fuel prices in the
country, which allowed
Recope to build its
inventory and cash
reserves.
Quesada and Desanti
discard any major fuel
price drops in the new
year.
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