Hungary, Government lifted a price cap on fuels after a lack of imports and panic buying led to fuel shortages

Hungarian Government lifted a price cap on fuels after a lack of imports and panic buying led to fuel shortages across the country in the past days. Introduced a year ago, the price cap was set to expire at the end of December 2022.

MOL said earlier that the only solution to alleviate the serious fuel shortage was to create the conditions for increased imports, as the company was not able to import any more petroleum products, while its Danube refinery was still undergoing maintenance and running at 50-55 % capacity.

Foreign companies have cut fuel shipments to Hungary since the Government capped the price of petrol and diesel at 1.15 euros per liter a year ago, as part of its measures to protect the households against the effects of the energy crisis in the run-up to parliamentary elections in April 2022. In July, the Government had to narrow the scope of eligibility, and since then the fuel price cap has applied only to drivers of privately owned vehicles, farm vehicles and taxis.

MOL CEO Zsolt Hernadi said that about a quarter of petrol stations in Hungary have run completely out of stock, adding that it would take up to two months to restore imports, and stability. However, the abolition of the price cap would help alleviate the shortage on the market within a few days.

The price of petrol will rise to about 1.53 euros per liter, while the price of diesel will be 1.67 euros per liter. Authorities expect that ending of the price cap will boost inflation, but did not give an estimate. Hungary’s annual inflation is already running above 21 %.