by Rod Hughes

The heads of political blocs in the Legislative Assembly are all agreed that elimination of the 97.50 colon-per-liter tax on diesel fuel but only if the gasoline tax is not increased. Thie addition of the diesel tax to gasoline would have served a dual purpose for the Arias Administration—as an anti-inflationary measure while assuring that gasoline consumption for private cars would have diminished. This would help the country’s balance of trade.

But the higher gasoline tax, on top of increased prices for petreolum fuels, would have been wildly unpopular with motorists. Oscar Nunez, floor leader of the administration’s National Liberation Party, admitted that the original plan was not “politically viable,” according to the daily La Nacion, and some other way would have to be found to fill the budgetary “hole” left by the elimination of the diesel tax.

Like most modern nations, Costa Rica moves its produce, as well as all retail products, to market by diesel-powered truck. Moreover, the high price of the fuel has placed a pinch on bus lines in a country where public transport is vital. Cutting out the diesel tax might avoid a hike in fares which would severely limit the mobility of the poor. But, since most taxis here have gasoline engines, this sector of the public transport picture would be hurt. Taxi owners also have a habit of striking by blocking public thoroughfares, which they have done before for far less cause than higher fuel prices.

Nunez speculated that two ways to fill the budgetary shortfall would be cut spending on non-social programs—if any can be found. Another alternative would be raising the exit tax at airports, already $26. But, along with the increasing airline fares, this would hurt one of the prime sources of foreign exchange, tourism. (Past administrations have done this. It never seems to occur to politcos that you can milk tourists many times, but you can only skin them once…)

The lawmakers are being yanked this way and that. Friday the Chamber of Transporters (bus ines) threatened a general strike if the diesel tax was not removed. The Liberatian Movement, characteristically backing less government involvement, are urging the slashing of programs within the budget and are firmly opposed to the increased gas tax which would nearly double the price of premium. Libertarian deputy Ovidio Aguero snidely suggested that the administration pay fewer consultants and use the money to offset the diesel tax shortfall, a reference to the administration’s use of private donations such as the $2 million given by BCIE, an international bank.

Political sarcasm aside, even within parties deputies are divided in their counsels. Citizen Action Party (PAC) deputy told La Nacion that he isn’t opposed to adding the tax to gas while his fellow PAC representative, Francisco Molina, is vehemently opposed. And some are making political hay. Without offering any solution, Social Christian Unity deputy Jorge Eduardo Sanchez let it be known that he would support the bus lobby in congress as well as in the streets if they choose to strike.