Fuel Price Cap Cannot Be Maintained for Long

If the government does not phase out a gasoline price cap it had introduced, there could be even more serious disruptions in supply than at present, Attila Holoda, energy market expert and former energy state secretary of the Orbán government, told mfor.hu in an interview.

Holoda believes that the government will be forced to lift the fuel price freeze due to the growing shortage.

The Hungarian oil and gas company Mol is currently forced to supply petrol stations in Hungary on its own, having served only 70% of them before the introduction of the official prices. According to the expert, the reason for the change is that there are no wholesalers other than Mol who import fuel from abroad, as the effective price makes it more profitable for them to sell in neighboring countries, while in Hungary they would make a loss with the HUF 480 price set by the government.

He added that because of problems with refinery maintenance, Mol is also unable to supply at full capacity the petrol stations it had previously contracted with other wholesalers, and has recently stopped supplying them virtually altogether. "All this is clearly a negative consequence of the price cap, and if it is not removed by the government, there could be even more serious disruption than at present."

Attila Holoda also pointed out that not only has the number of stations to be supplied grew, but the country's fuel consumption has also increased due to depressed prices. "In recent years, Hungary has been consuming an average of five million liters of fuel a day, but recently the price cap has caused eight million to be consumed, while in the spring, when people were rushing to the gas stations, this went up to nearly 15 million liters."