New Bus Fares May Leave Users Pleasantly Surprised For Once.

Recent news has been mostly bad for Costa Rican wallets – gas prices have increased, food costs are on the rise and the colon (local currency) just doesn’t seem to go as far as it used to. In addition, bus fares have been steadily on the rise, outpacing inflation. Finally, good news may be on the horizon: the Public Service Regulatory Authority (Aresep) recently announced that a further ¢80 decrease in per-liter diesel costs (about $0.04 per gallon) would lead to the country’s first bus far decrease in years.

Costa Rica’s bus system is heavily used by people from all walks of life. Of course, many cannot afford cars of their own — some can hardly afford to live at all — and these are the hardest hit. To put rising fare costs into understandable terms: a San Pedro bus cost ¢145 per ride less than two years ago. Today, that same bus costs ¢185, a 27.5 percent increase in just 18 months. A Costa Rican who used this bus to go to work in January 2007 shelled out about ¢6,280 (about $11.50) per month; today, that same Costa Rican pays more than ¢8,000 (about $14.60) per month.

That sum may not sound like a lot, but it is to many. Consider a family whose parents both ride the bus to work, and whose two children ride the bus to school: suddenly, that family must pay ¢32,000 ($58) per month, compared to the ¢25,120 ($45.75) they paid two years ago. When you make only $400 monthly, the difference can be huge.

In light of these numbers, many people Living in Costa Rica hope that diesel costs will come down enough that savings will be reflected in bus fares. The precious liquid has already decreased by ¢76 per liter, a savings of ¢19 million ($34,600) for a bus company that consumes 250,000 liter per month. Since fares are regulated by law however, any decreases must be approved and enforced by Aresep. Aresep will not lower rates until diesel’s decrease has reached a total ¢160 per liter. The regulatory authority is currently considering a further ¢45 per liter reduction, effective November, but ¢35 per liter still remains for lower bus fares.

Bus fares are calculated based on four factors: diesel costs, inflation, devaluation and salaries. Devaluation takes into account bus maintenance and part replacement, while inflation deals with administrative costs. Diesel costs account for 27.4 percent of each fare, while devaluation swallows up 33.3 percent, salaries 28 percent and inflation, 11.1 percent. Each one of these factors helps create fares that are as fair to all as possible, allowing Costa Ricans to travel inexpensively, and bus companies to turn a profit.

Since the other three factors are relatively steady, diesel is the only factor that has a strong impact on bus rates. In August 2007, fares went up by a startling 13 percent. Just over a year later, they look poised to fall almost as much. “We’re controlling that factor all the time. The idea is the give that benefit (a discount) to the consumers; nothing would be more pleasant,” Luis Fernando Chavarria, director of transportation for Aresep, concluded.

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Filed under: Travel on October 15th, 2008