Costa Rica News – When will the madness end? Gas prices that are through the roof and Recope, Costa Rica’s non-oil refining monopoly, still cannot post a profit. But what else should you expect from a government owned entity.
The Costa Rican Oil Refinery, known as Recope, reported a ¢6,000 million (about $11.1 million) operating loss last year.
This drastic change from the previous year is accredited to a 2% decrease in the sale of hydrocarbons as well as increased legal and operating fees.
According to Recope, the extreme situation was created in part by the severance pay for workers that had been made a provision the previous year. Without that, the operating income would have actually been positive. The collective agreement caps severance pay at 20 years when pensioned. Over five years, the refinery payed ¢15,300 million in legal fees.
Last year the company sold 19 million barrels of fuel, not far off from the 19.4 million in 2014. ICE produced less heat and bought fewer barrels of low sulfur bunker, leading to the 2% reduction.
The fuel rate was reduced based on international oil prices, causing a 27% drop in revenues over 2014. The company also paid less on its own oil bill. All things considered the company ended up at negative ¢6,000 million.
When will competition be allowed in this market in Costa Rica? This company has over and over again showed it cannot actually run a business and it passes its shortfalls onto the consumer.
