Hungarian gov't increases tax on fuel

A law amendment changing the regulation of the excise tax on fuels will come into effect in Hungary in early September. In view of the current market developments, chances are high that the excise tax on both gasoline and diesel will rise as of October, portfolio.hu reports.

The financial website writes that the cabinet will make the rate of the excise tax dependent on the world market price of crude oil. If the price of Brent crude drops below USD 50 a barrel, the excise tax will be raised. The excise tax would go up by HUF 10 per litre on diesel and HUF 5 per litre on gasoline should the world market price of oil drop below the threshold. If crude prices remain persistently over USD 50 per barrel, the current excise taxes will remain intact.

The National Economy Ministry has recently announced that the National Tax and Customs Office (NAV) will publish on 22 September the average market price of Brent crude between 1 July and 15 September and that will decide whether there will be an excise tax hike or not. The possible excise tax changes will be implemented as of 1 October.

The average price of Brent crude for the period between 1 July and 30 August was under USD 47 per barrel, which means there is a good chance the excise tax on fuels will actually be raised. There is no fundamental factor in sight that would keep pushing the price of oil higher in the coming weeks, unless the policymakers of OPEC countries start dishing out statements to drive prices higher ahead of an extraordinary meeting scheduled for the end of September in Algeria.