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Why the Cost of Fuel in Costa Rica Will Never Be Inexpensive

Costa Rica News – Although we have had a couple of price breaks at the pump recently in Costa Rica, the cost of gasoline in Costa Rica is still very high.  You might be thinking to yourself why can’t Costa Rica reduce the price of gas even enough to be equal to it’s neighbors?

costa rica gas pricesThe reason are taxes……

It doesn’t matter how low the international price of fuel gets, because here in Costa Rica the price will be double no matter what. The fuel tax is the ingredient in the price of fuel that is heavy on our wallets.

The latest adjustment in the tax came to represent 47% on top of each liter of regular gasoline and 46% on super. That means that when you pay ¢503 for regular, ¢235 is going directly to the Ministry of Finance.

The tax we pay now was created in 2001 when lawmakers grouped several already existing taxes together. It is adjusted for quarterly inflation. The tax for diesel is lower, at 29%, due to incentives designed to help buses and agricultural transport, which most commonly use this type of fuel.

The government pledged to lower fuel prices but was not able to follow through on that. Some experts have recommended the government do away with the tax on fuel, but as that represents 12% of the annual tax revenue it would be catastrophic for the economy to do so.

Additionally, 29% of the tax goes to maintaining the national system of roads, which have been considered some of the worst in the region…..so where is this money going?

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