• Costa Rica Real Estate

RECOPE opposes referendum that could break its fuel market monopoly

March 20, 2017

Officials of the state-owned Costa Rican Oil Refinery (RECOPE) said breaking the fuel market monopoly would not result in lower prices and, on the contrary, would endanger fuel supply across the country.

RECOPE Executive President Sara Salazar said at a news conference on Monday morning that – as one might expect – the organization opposes a referendum promoted by the citizen group “Ya no más RECOPE” (“No more RECOPE”) that would allow citizens to vote on whether to lift RECOPE’s monopoly.

The group submitted a request to the Supreme Elections Tribunal (TSE) last year to hold a national referendum in which citizens would weigh in on the issue. In addition, the group has staged public demonstrations asking for the approval of a bill to open the fuel market. That bill is currently at a stalemate at the Legislative Assembly.

Salazar said that an analysis on the referendum request conducted by RECOPE’s legal department found that opening the market does not guarantee that fuel prices will drop.

“It would actually leave us in a state of vulnerability,” she said, adding that “it would be impossible for us to fulfill our obligation to ensure uninterrupted supply of fuel, all over the country, and at an affordable price.”

The citizen group claims that breaking the state monopoly would result in lower fuel prices and would eliminate extra salary benefits from RECOPE workers, which they consider excessive.

RECOPE’s news release refutes that statement and said salary perks included in collective bargaining agreements “represent less than 1 percent of the retail prices of fuels.”

Not RECOPE’s fault

Salazar said the promise of lower prices is a piece of fiction, because the Public Services Regulatory Agency (ARESEP), and not RECOPE, regulates fuel prices.

“On the contrary, RECOPE has consolidated a process that guarantees the purchase of fuels with the best import prices,” she said. “We sell at prices set by ARESEP, and we don’t have any control over the methodology they use to set prices.”

However, RECOPE sparked an angry response from citizens’ groups earlier this year when it asked ARESEP for three consecutive rate hikes during the first two months of this year.

In order to get TSE’s approval for the referendum, the “Ya no más RECOPE” group will have nine months to get the signatures of just over 160,000 citizens, representing 5 percent of registered voters.

The group is currently working to fulfill TSE requirements for the approval of the forms for collecting the signatures.

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