President Solís wants to know how fuel prices are determined

The president has taken the first step to become involved in the struggle over rising fuel prices.

The president, Luis Guillermo Solís, has asked Dennis Meléndez Howell for background on how gasoline prices are set. Meléndez is the regulator general, the head of the Autoridad Reguladora de Servicios Públicos. This is the agency that sets all sorts of utility prices.

Casa Presidencial released a letter Tuesday in which the president made the request. Solís also asked for the regulator’s opinions on how to control the increases in fuel prices.

The fixing of fuel prices takes place every month. The prices cover gasoline, diesel fuel and liquid petroleum gas, which is used for cooking by many Costa Ricans.

A.M. Costa Rica has reported that the consumer prices of gasoline are about a third government taxes. The entire process is controlled by the government. The petroleum is imported by the Refinadora Costarricense de Petróleo S. A., a government agency.

In addition to taxes, the consumer price depends on the rate of exchange between dollars and colons and the world price of petroleum. The Autoridad has a complex formula that it uses each month. The figures usually are behind when the dollar is increasing because the agency used exchange rates a month old.

The recent 11.4 percent increase in the value of the U.S. dollar against the colon has been reflected in local fuel prices. A U.S. gallon, either plus or super, is easily more than $5.

The Refinadora is generally recognized as being inefficient. There are occasional arrests at the Panamá border when individuals try to smuggle in gasoline from the southern neighbor where prices are lower.

The Costa Rican government and the environmental lobby have worked hard to prevent drilling for petroleum here. Plans to do so offshore in the Caribbean generated massive public protests. Former president Laura Chinchilla pulled the plug on a Denver, Colorado, firm that had a contract to explore for petroleum in the northern zone.

The government of Nicaragua is trying to make offshore contracts with private firms, and some of the maritime area involved is really Costa Rica, the government here says.

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