In a statement on Monday, Hungarian Prime Minister Viktor Orbán announced measures to cap fuel prices. In view of the dramatic developments on the world market, the Hungarian government is introducing a “protected price” for gasoline and diesel with effect from midnight.
Under the new regulations, retail prices at gas stations may no longer exceed certain maximum levels. For 95 octane gasoline, the limit has been set at 595 forints (US$1.54) per liter, while the price per liter for diesel will be capped at a maximum of 615 forints (US$1.59).
Viktor Orbán emphasized on his social media page that
this protective mechanism is specifically intended to benefit Hungarian stakeholders. Therefore, the price cap applies exclusively to vehicles with Hungarian license plates and Hungarian vehicle registration documents.
In addition to private individuals, the measure is also expressly aimed at farmers, freight carriers, and companies in order to ensure the stability of the domestic economy.
In order to guarantee security of supply despite the price cap, the government has ordered the release of state security reserves for a period of 45 days. “We are releasing state reserves to secure supplies,” the head of government explained.
In addition to the price freeze, Economy Minister Márton Nagy announced further steps.
To further reduce the burden on the population and businesses, the excise tax on fuels will be reduced to the EU minimum.
The tax on gasoline will fall from 158.8 to 139.55 forints (from 0.41 euros to 0.36 euros) and on diesel from 148.76 to 128.28 forints (from 0.39 euros to 0.33 euros) per liter. In addition, Hungary is imposing an immediate export ban on crude oil, gasoline, and diesel to prevent fuel from flowing abroad and to combat abusive trade practices.
The government’s decision is a direct response to the recent escalation in the global energy market. As a result of the war, the Ukrainian oil blockade, and the conflict in the Middle East, prices exploded on Monday, as reported by Index. The price of North Sea Brent crude climbed to $120 per barrel by Monday morning. At the same time, U.S. light crude WTI recorded its strongest daily increase since spring 2020, rising by over 26 percent.
Without government intervention, prices at Hungarian gas stations would have reached record highs on Tuesday.
Experts from the fuel price blog holtankoljak.hu had warned that without a cap, the price of diesel would have risen to around 649 forints (1.68 euros) per liter.
The Hungarian fuel market thus experienced a dramatic turnaround. While prices in January and the first half of February remained relatively stable, fluctuating between 556 and 576 forints (1.44 and 1.49 euros), the closure of the Strait of Hormuz and geopolitical tensions triggered a considerable wave of inflation. Within a few weeks, the price of gasoline rose by more than 20 forints (0.052 euros), while diesel actually increased by over 50 forints (0.13 euros) per liter before the government pulled the emergency brake.
The urgency of the measures was justified by the need to protect families and domestic agriculture from the negative effects of the international energy crisis that is currently affecting the whole of Europe.
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Via mti, holtankoljak.hu, index.hu; Featured image: Pexels
The post Government Responds to Oil Crisis with Fuel Price Cap appeared first on Hungary Today.
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@PM_ViktorOrban: To curb exploding fuel prices, we are introducing a protected price from midnight for all Hungarian families and businesses.
Petrol: 595 HUF
