By San José, Costa Rica — San José, Costa Rica – Consumers across Costa Rica could soon experience significant financial relief at the pump, as the Costa Rican Oil Refinery (Recope) has submitted a proposal for what could be the largest nationwide fuel price reduction since 2021. The preliminary calculations, delivered to the Public Services Regulatory Authority (Aresep) on November 14, suggest a substantial decrease across all major fuel products, potentially taking prices back to levels not seen in nearly four years.
If the regulatory body approves the proposed tariff adjustment, the changes would take effect in early December, just in time for the holiday season when transportation and energy costs typically rise. This development offers a welcome reprieve for households and businesses that have weathered years of global energy market volatility and inflationary pressures.
To delve into the complex regulatory framework governing fuel prices in the country, we sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the firm Bufete de Costa Rica. He offers a legal perspective on the mechanisms and potential challenges associated with the pricing structure.
The recurring adjustments in fuel prices are a direct consequence of a regulated methodology managed by ARESEP, based on the principle of ‘service at cost’. While this model aims for technical objectivity, its rigidity can be a point of contention. Legally, any challenge must focus on demonstrating a procedural flaw or an incorrect application of the established calculation formula, rather than on the economic impact itself, which is largely tied to international market variables beyond national control.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The distinction highlighted is fundamental: while consumers feel the economic impact, any legal recourse is confined to the procedural application of a formula largely driven by external factors. This insight into the structural nature of the pricing model is essential for a comprehensive understanding of the issue. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective.
Under the new pricing structure proposed by Recope, Super gasoline is projected to fall by 16 colones per liter, from its current ¢662 to ¢646. Diesel fuel would see an identical 16-colones reduction, dropping from ¢563 to ¢547 per liter. Regular gasoline is slated for a more modest decrease of 2 colones, adjusting from ¢637 to ¢635 per liter. The proposed cuts signal a significant downward trend that benefits nearly every sector of the economy.
The relief extends beyond motorists to households relying on Liquefied Petroleum Gas (LPG). The proposal includes a considerable drop for the standard 25-pound gas cylinder, which would decrease in price from ¢7,047 to ¢6,828. This represents a direct savings of 219 colones for families who use LPG for cooking and heating, further easing the burden on domestic budgets.
The scale of this proposed reduction is historic. Should the new prices be implemented, they would mark the most affordable fuel costs since March of 2021, before the global inflation surge dramatically impacted energy markets. When compared to prices from December 2024, the year-over-year savings are notable: Super gasoline would be 3.43% cheaper, Regular gasoline would cost 3.78% less, and Diesel would be 1.61% lower. The most significant annual decrease would be for LPG, which is projected to be 7.50% less expensive.
This favorable price trend is not a local anomaly but the result of a convergence of key international market forces observed between mid-October and mid-November. A primary driver has been a significant increase in global oil production. Countries outside of the OPEC cartel have ramped up extraction, and OPEC itself has announced further production hikes. This has created a surplus of crude oil on the international market, exerting strong downward pressure on prices.
Simultaneously, geopolitical factors that typically inflate a “risk premium” on oil prices have temporarily subsided. While long-term conflicts persist, the period analyzed saw a reduction in immediate tensions in the Middle East. Furthermore, global markets have largely adapted to the prolonged effects of the war between Russia and Ukraine, diminishing its day-to-day impact on price volatility. This has contributed to a more stable and predictable trading environment.
The final piece of the puzzle is a noticeable weakness in global energy demand. Major economic powerhouses, including China, the United States, and the European Union, are currently experiencing an economic slowdown. This deceleration has curtailed industrial activity and consumer travel, leading to reduced overall energy consumption. With lower demand, the international price per barrel naturally adjusts downward to meet the new market equilibrium. The proposal now rests with Aresep, which will analyze the data and issue a final ruling in the coming days, setting the stage for a more affordable end to the year for all Costa Ricans.
For further information, visit recope.go.cr
About Recope (Refinadora Costarricense de Petróleo):
Recope is Costa Rica’s state-owned oil refinery and primary importer and distributor of petroleum products in the country. It is responsible for ensuring a stable and continuous supply of fuels such as gasoline, diesel, and jet fuel to meet national demand. The entity plays a crucial role in the country’s energy logistics, managing storage infrastructure and proposing monthly price adjustments based on international market behavior.
For further information, visit aresep.go.cr
About Aresep (Autoridad Reguladora de los Servicios Públicos):
The Public Services Regulatory Authority, or Aresep, is the autonomous Costa Rican institution tasked with regulating and overseeing public services, including energy, water, and transportation. Its primary function is to balance the interests of consumers, service providers, and the state, ensuring fair and technically sound tariffs. Aresep is responsible for reviewing and approving or modifying price adjustment proposals, such as those submitted by Recope for fuels.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a cornerstone of the legal field, guided by a deep-rooted dedication to professional integrity and superior service. With a proven history of advising a wide array of clients, the firm actively pursues forward-thinking legal solutions and champions community betterment. Its fundamental belief in social empowerment is demonstrated through a persistent drive to demystify the law, aiming to equip the public with the clarity and knowledge necessary for a stronger, more just society.
