Government lowers price of jet fuel as a strategy to attract tourism.

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The President of the Republic, Carlos Alvarado, and the Minister of Environment and Energy, Carlos Manuel Rodríguez, in coordination with the Minister of Tourism, María Amalia Revelo, signed Executive Decree No. 42352-MINAE that establishes a reduction in the price of sale of jet fuel paid by airlines.

This edict modifies Decree 39437-MINAE, whereby aircraft gasoline subsidized liquefied petroleum gas, bunker, asphalt and asphalt emulsion. In 2019, this subsidy represented an average charge of ₡ 8.12 per liter in the sale price of jet fuel paid by airlines.

It is now up to the Public Service Regulatory Authority (ARESEP) to set the new price for jet fuel, eliminating that subsidy.

The decree specifies that the sale price of jet fuel must be set taking into account the objectives and goals of the VII National Energy Plan 2015-2030, to ensure that the price of fuel is efficient and contributes to the country’s competitiveness, as well as compliance of the objectives and goals of the “National Tourism Development Plan of Costa Rica 2017 – 2021”.

This payment has affected the cost of air tickets to and from Costa Rica, which has led airlines to resort to the practice of “tanking”, which consists of traveling with fuel surcharges to avoid purchasing them in the country; or, to have to incur higher operating expenses, when they do not have the possibility of “tanking” because they are long-range journeys.

President Alvarado indicated that the measure seeks to avoid those situations that make the country less competitive in the framework of a series of efforts being made by the Government of the Republic to achieve an economic revival, particularly in the tourism sector, amid the pandemic global produced by the coronavirus COVID-19.

“Tourism is one of the most important economic and cultural activities that the country has, both for the productive chains that it generates, and for the cultural exchange with other nations. Hence our main interest in providing a prompt solution to entrepreneurs in this sector, “said the head of government.

For his part, the Minister of Environment and Energy, Carlos Manuel Rodríguez, stressed that in the global and national scenario, one of the main challenges to achieve balanced development with the environment is the application of effective public policies in the energy area, oriented to energy efficiency, the reduction of emissions, the diversification of the energy matrix, the reduction of social gaps and the promotion of national competitiveness.

“We will continue making clear and forceful decisions that allow us to place tourism again as the first industry in the country,” said the Minister of Tourism, María Amalia Revelo. The hierarchy stated that this measure is a very important step to be competitive against other tourist destinations in order to attract the tourists we want to visit us in order to reactivate our sector.

Revelo explained that the airway is the main port of entry for tourists to the country. In 2019, 73% of international arrivals were via this route, that is, 2,314,888.

According to the International Air Transport Association (IATA), the cost of jet fuel represented, on average, about 24% of airline operating expenses in 2019, a percentage that changes with the behavior of the international price of crude oil and that increases as the distance between the origin and destination airports increases.

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