Hungarians Would Phase Out Fuel Price Cap Gradually

It has long been an important element of government policy to keep the price of certain goods and services low so that the bill is settled in a less visible way, the business news site napi.hu says. This has happened with utility and food prices, interest rates on loans and fuel prices. In the case of the latter, however, motorists seem to see the negative effects and are already getting rid of the measure, at least according to a representative survey conducted by Pulzus Research for napi.hu.

One of the most frequently highlighted of the government's measures, which have been detrimental to operators, is the fuel price freeze, which, while helping those who cannot drop off their cars (for example because they live in a place where public transport is not an alternative), has driven out fuel wholesalers (except for the Hungarian company Mol) and importers, while a significant number of independent petrol retailers claim that the measure has pushed them to the brink of bankruptcy. Many of them are family businesses. It has also led to supply disruptions, temporary stock problems and fuel shortages, but has not helped to meet emission reduction targets.

For motorists, the fuel shortage may be the most striking, as Mol alone cannot meet all demand. Before the price freeze, Mol supplied 70% of the market as a wholesaler, while other players shared the remaining 30%, but since then Mol has had to supply 100%. This with the refineries in Schwechat, Százhalombatta and Litvinov already closed. The Association of Independent Petrol Distributors recently said that Mol would only meet 50% of their needs and only if they were to transport the fuel themselves.

So the situation is so precarious that it is not at all certain that there will be fuel at the pump you stop at, or that you can buy as much as you want. Several chains – including Mol itself – have limited the amount you can buy in a day, so for example they also record the registration number when you make a purchase. In response to the crisis, the government itself has banned cheaper fuel for everyone except Hungarian privately owned cars and farm machinery.

Hungarians must have had enough of the above, with only 11% of Hungarians saying they would never introduce the measure, according to a representative survey by Pulzus. Most respondents – 35% – are in favor of a gradual phase-out, but 19% said they would abolish it overnight. Also popular (24%) is the idea of linking the official price to a quantitative limit, i.e. only up to certain liters. This could be done in practice by scanning the barcode of the registration license, which is already used by the pumping stations. 11% of people chose not to respond.