Recope Asks For More Gasoline Price Hikes
Notwithstanding a decision by the Sala Constitucional or Sala IV (Constitutional Court) that would end the automatic calculation of gasoline prices, that has temporarily stopped the approved increase on super gasoline prices that were to go into effec this week, the Refinadora Costarricense de Petróleo (Recope), has made a request to the Autoridad Reguladora de los Servicios Públicos (Aresep), for an increase of ¢16 colones in the price of a litre of regular gasoline.

The head of the Aresep, Fernando Herrero, yesterday said that the Sala IV decision on an appeal made by a citizen to stop the automatic increases and go back to the public hearing process for approvals, will not mean much because, public hearing or not, if the price of crude increases on international markets, Recope will go bankrupt if increases are not granted.

The regulator added that a public hearing would be a great expense as it would need 192 hearings per month for the 12 different fuels that are sold by Recope, hearings that would have to be held in each of the eight regions of the country, as defined by the rules of the Aresep, which will add costs to the regulatory agency and Recope, in manpower to attend all the meetings.

Herrero said that the technicians of both institutions have already worked out a new methodology for price adjustments which complies with the resolutions of the Sala IV.

The regulator head said he hopes to have the proposal ready by the end of this week at which time the Aresep will call for a public hearing to discuss the new method of price changes.

That process can take as much as 37 days, during which time there could be no price adjustments in the cost of fuel in Costa Rica notwithstanding what is happening to the price of crude internationally.

For his part, the ministro de Ambiente y Energía (environment and energy), Roberto Dobles, said that the court decision has him "very worried" as it will place a great financial stress on Recope.

Carlos Quesada, head of administration and finance at Recope, said that the statea agnecy sepens between ¢1.8 and ¢2 billion colones a day in the purchase of crude. Quesada said that the Recope cash flwo will allow it only 12 days of purchases, and that with the company will have to go into debt to meet the demand, having to use the us$90 million dollar line of credit by the Banco Central de Costa Rica (BCCR), which will allow it to operate another 25 days without increases.

Quesada pointed out that each public hearing can take up to 2 months and that Recope will have to absorb the costs of increases of crude on international markets and the cost of debt as well.