The Hungarian government announces the abolition of the fuel price cap. For this reason, a shortage of gasoline has led to a rush to the gas stations.
“The measure is abolished” with immediate effect, says Gergely Gulyas, Prime Minister Viktor Orban’s chief of staff, at a press conference. Indeed, the latter points to the European sanctions against Russia, regularly criticized by the Hungarian executive for the economic stagnation of the country.
Disruption of supply and demand
“What we feared has happened,” he said: the entry into force of a European Union (EU) embargo on Russian seaborne oil “is causing tangible disruptions in oil supply.”
Earlier, the company MOL had lamented a “clearly critical supply situation”.
“Demand is exploding, consumers are stocking up and panic buying is starting,” Gyorgy Bacsa, the company’s executive director, said in a statement sent to AFP.
Media reports show queues of up to 100 meters long at gas stations around the country. An AFP photographer also noted difficulties in several places in the capital Budapest.
“A partial shortage of our products affects our entire network and a quarter of our stations are completely dry,” laments Mr. Bacsa.
The fuel shortage is due to a 30% drop in fuel imports, as well as maintenance operations at one of MOL’s refineries, which are expected to last “several weeks,” he said.
The Association of Independent Service Stations (FBSZ) is calling on the government to abandon the cap on fuel prices, blaming it for the remarkable shortage of gasoline in recent weeks. In order not to sell at a loss, foreign companies are reducing their fuel deliveries to Hungary, according to FBSZ.
Price caps to support the economy
In November 2021, Budapest decrees a fixed price of approximately 1.17 euros per liter of unleaded 95. Revised every three months, the cap was last extended in September.
This measure, also applied to a series of basic food products, aims to support economic activity and curb the price boom, argues the government.
Inflation in Hungary exceeded 21% year-on-year in October, its highest level since 1996, and the third highest in the EU, according to Eurostat. The governor of the Hungarian central bank, Gyorgy Matolcsy, castigates the “price caps”. He estimates that they inflate “inflation by three to four percentage points” by pushing merchants to raise prices of other goods.
