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Tag: gas prices

Official Fixed Prices to Continue for at Least Four More Months

The government has made a decision on the so-called “price stops,” announced Prime Minister Viktor Orbán on his social media page on Thursday.

According to his Facebook post:

The Association of Independent Gas Stations responded to the announcement by saying they hoped there would be enough fuel to last this long.

The government has received a good deal of criticism over its official price fixing policies, writes Magyar Hang.

Numerous smaller filling stations have become unprofitable and insolvent since the policy to set the price of regular gas at 480 Ft. (US $1.27) per liter was introduced last November, which has also led to a shortage of fuel.

The official fixed prices on certain food items, launched on February 1, has also led to considerable consternation from grocers. Seven products, crystal sugar, BL-55 wheat flour, sunflower cooking oil, pork leg, chicken breasts, chicken backs, and 2.8% UHT milk, have to be sold at exact the price they were on October 15 last year, even if it means a loss for retailers on each item sold.

In addition, stores are required to stock the foods items under the fixed price policy. [Magyar Hang]

European Commission Investigating Hungary’s Discriminatory Gas Price Regulation

The European Commission is investigating Hungary’s regulation on gas prices, RTL News has learned.

In late May, Minister Gergely Gulyás announced that only vehicles with Hungarian registration and licence plates would be able to buy regular gasoline at the official fixed price of 480 Ft. (US $1.31) per liter, in an attempt to stop “gas tourists” from neighboring countries crossing the border to fill up their vehicles in Hungary.

“We are currently examining the scope, content, cause, and justification for the measure,” Sonya Gospodinova, spokesperson for the European Commission, told the television news channel on Thursday.

Gospodinova added that EU rules generally prohibit setting higher prices for citizens based on nationality or the Member State in which they live. A decision is then made on whether or not to initiate infringement proceedings.

However, any new proceedings launched by the EU against Hungary could drag on for years, notes RTL.

“Gas station owners have become somewhat like aliens in their own country,” said Gábor Egri, a representative for independent filling stations, in describing the situation since May 27 to “Reggeli.” [Magyar Hang]

Gas Stations Unable to Implement New Gov’t Decree on Fuel Prices

The Association of Independent Gas Stations has asked the Prime Minister for “urgent help” in a letter. The group claims that the new government decree stating that vehicles with Hungarian and foreign license plates will be able to refuel at different prices from Friday is “incomprehensible and unenforceable in several respects.”

The decree stipulates that the normal price of the fuel will have to be displayed at the pumps, but cars with Hungarian license plates will get a discount on the final price according to the government’s price cap policy.

The letter from the association representing gas station owners states that the regulation jeopardizes the security of fuel supply and raises a number of issues:

  • According to the decree, non-Hungarian vehicles can only be served at the high-performance pump, which will be impossible in practice for passenger cars.
  • The regulation provides for three days to overcome technical barriers, which cannot be complied with due to the complexity of retooling cash register systems. Without a cash register system that complies with the regulation, it will be impossible to function.
  • Under the regulation, gas stations will be forced to discriminate against foreigners, making them subject to litigation under European Union law.
  • According to the regulation, service staff will have to request and inspect customer documents. But as they do not have the official authority or adequate legal protection to do so, these situations can lead to confrontations with customers.

[444]

Dozens of Small Gas Stations Sue Hungary in Strasbourg Court Over Price Cap on Fuel

Hungarian gas stations are turning to the European Court of Human Rights over the official price cap placed on regular fuel and diesel oil in Hungary, lawyer Dániel Karsai told Szabad Európa.

Karsai said that close to 50 filling stations had joined the class action lawsuit in the Strasbourg-based court, telling the news source that since gas stations lose money on every single liter of fuel sold in Hungary, this harms their property rights and their expectations of making a profit.

The lawyer also said that filling stations had never received any substantial compensation for their losses, as the state subsidies of 20 Ft. per liter they receive do not cover their losses. [Magyar Hang]

Price Cap on Fuel May Cause 500-600 Gas Stations to Close Next Month

500-600 Hungarian filling stations may close by June 1, said Gábor Egri, president of the Alliance of Independent Gas Stations on Inforádió about the government’s plans to extend the price cap on fuel to July 1. The interest group has proposed a three-point plan to the government to assist filling stations.

He added that it was unethical for family-run businesses to bear the burden of subsidizing mobility for Hungary’s 3.5 million drivers. [Magyar Hang]

Orbán: Officially-Set Prices to Stay in Place Until July 1

“We’ve decided to extend the price restriction measures in both cases until July 1,” announced Prime Minister Viktor Orbán after Wednesday’s government session. “So the prices for both fuel and certain grocery items will remain unchanged until July 1.”

The official prices set for seven food items, sugar, flour, sunflower oil, pork leg, chicken breast, chicken backs, and 2.8% milk, was originally supposed to end on May 1, and the price cap on regular gasoline, set at 480 Ft. (US $1.34) per liter, was supposed to end on May 15.

Orbán said that prices will continue to increase while the war between Ukraine and Russia is still raging. [444]

80% of Hungary’s Small Filling Stations Near Bankruptcy Due to Gov’t Price Cap on Fuel

Although they recently got some financial help from the state, 80% of small gas stations remain on the edge of bankruptcy, said Gábor Egri, President of the Alliance of Independent Gas Stations, to ATV News. The industry interest group was created after the government introduced its price cap on regular gas and diesel oil.

Smaller gas stations have been struggling since the government introduced the policy to limit the cost of fuel for drivers.

Egri said that that the financial aid that gas station owners recently received was in fact “just enough to keep these companies alive on ventilators.” [Index]

Price Cap Policy on Fuel Continues to Deliver Pain to Filling Stations

Chancellor Minister Gergely Gulyás said in yesterday’s Government Information Briefing that the government would soon determine the fate of several different fixed price policies, but he believed that the measures had basically been successful. However, gas station owners would likely disagree with him from their perspective.

The price cap on fuel over the past six months has made gas retailers unprofitable and is not sustainable for the long run, Ottó Grád, Secretary General of the Hungarian Petroleum Association, told Népszava.

While Hungary’s larger oil and gas companies are not threatened with bankruptcy, it will take years for them to work off the losses they’ve accumulated once the price cap policy ends, he added. [Népszava]

Momentum reports MOL CEO Hernádi for inciting panic with fake photo

picture of Zsolt Hernádi and Gergely Gulyás

At Thursday evening’s government press conference, Minister Gergely Gulyás and MOL CEO Zsolt Hernádi announced new restrictions on gasoline, and reassured the public that Hungary had a sufficient supply of fuel despite recent rumors to the contrary. They added that legal proceedings would be launched against those who incite panic through the spreading of untrue rumors.

But now Hernádi himself is now being accused of stoking fear over fuel in that very same press conference where the measure was announced.

The issue concerned another measure the two men announced, punishment for those transporting gasoline illegally. Highlighting the need for this, the MOL CEO held up a photo of plastic bags of gasoline being transported in the trunk of a car (pictured).

However, the picture was later debunked by reporters after the press conference. It originally appeared in a 2019 article in the Mexican press.

Following this development, Momentum announced on Friday that it would file a report against Zsolt Hernádi, asking authorities to examine whether the MOL CEO’s statements meet the criteria of inciting panic through the spreading of rumors.

[HVG]

Gov’t announces new restrictions on fuel in evening briefing

picture of Zsolt Hernádi and Gergely Gulyás

Gergely Gulyás, Minister of the Prime Minister’s Office (pictured, right), and Zsolt Hernádi, President and CEO of oil and gas company MOL (pictured, left), held an extraordinary press conference on Thursday evening in which it was announced that the government would continue the price cap policy on regular gas and diesel oil.

Gulyás said that unfounded rumors had begun circulating that the government’s price cap policy had become unsustainable, and that the country could not keep providing a domestic supply of fuel.

But the minister assured reporters that there is, and would be, enough fuel to supply the Hungarian market. He blamed gasoline tourism, traffic through the country, and deliberate incitement for the panic that had recently developed.

Minister Gulyás announced that the following restrictions would take effect immediately:

  • Gas falling under the 480 Ft./liter price cap will not be allowed for trucks with foreign license plates over 3.5 tons, and Hungarian ones over 7.5 tons.
  • Agricultural machinery can continue to refuel at 480 Ft./liter.
  • The excise tax on fuel will be reduced by 20 Ft.
  • Legal proceedings will be launched against those who cause panic through rumors that induce fear.
  • Those who provide fuel illegally will be punished.
  • Trucks will be banned on the upcoming four-day-long weekend.

A decree on these measures was published in the Official Gazette that evening, taking effect at 10:00pm.

[HVG, 444]

Gas station owners fear a wave of mass closures due to gov’t price cap on fuel

picture of gas pump

Private gas station owners are preparing to hold a car-based demonstration and submit a petition to Viktor Orbán if they are not able to make progress in their negotiations with the government today. They are also in the process of setting up their own interest group over the government-mandated maximum price set on regular gas, ATV News has learned.

The government recently extended its policy of capping the price of fuel at 480 Ft. (US $1.53) per liter until mid-May. If not for the policy, the average price of 95-type gas would otherwise be 520 Ft. ($1.66), and diesel gas would be 535 Ft. ($1.71) per liter.

Gas station operators are hoping to avoid a wave of bankruptcies that may be coming, as they already have to pay more to buy fuel than what they are allowed to sell it for.

444 reported on Saturday that the policy had already forced the first gas station in Hungary to shut down, as the price cap was causing the business to lose half a million forints a month. A similar fate may await hundreds more small filling stations if things do not change.

The National Association of Entrepreneurs (VOSZ) is representing the interests of private gas stations in negotiations with the Ministry of Innovation and Technology.

VOSZ Secretary General László Perlusz believes there could be a breakthrough in talks within a few weeks. He hopes that public money could help share the burden borne by the gas stations, or that directed government aid could go to affected businesses.

The government’s price cap on fuel has been causing serious problems for smaller filling stations for several weeks. Stations close to Slovakia, where fuel is significantly more expensive, have seen many drivers coming across the border to fill up in Hungary, and other stations have had to ration the amount they sell to customers.

[444]

Around 100 filling stations limiting gas purchases because of gov’t mandated price cap

picture of person pumping gas

Népszava has learned from fuel price-tracking website holtankoljak.hu that around 100 gas stations nationwide have started to limit the amount of fuel they are willing to sell to a single customer per visit. Generally they are restricted to purchasing just 5-10 liters (1.32-2.64 US gallons) of fuel, which is often just enough to make it to the next filling station.

The limit imposed by retailers on gas consumers is due to the government’s decision to extend the price cap on regular gasoline and diesel oil at 480 Ft. (US $1.53) for another three months. The policy was introduced on November 15 and expected to end three months later, on February 15.

Gas station operators say the restriction on quantity is necessary because they are selling their product at a loss, meaning that the more consumers buy, the more they lose.

Several filling stations have posted notices advising customers to get their gas from state-owned oil and gas company Mol instead. Since Mol is passing on the increases in world crude oil prices in its wholesale price, retail gas stations have to purchase fuel at increasingly higher prices. And as they cannot sell it at any higher price, they are the ones bearing the financial burden of higher fuel prices.

Industry analysts say this mainly affects smaller gas stations, and could lead to mass closures. However, the government has not taken note of their early warnings.

While filling stations cannot sell fuel above a certain price, they are free to limit the amount they sell at the pump. There is even one station that is only able to sell 60 liters a day, which can run out in a matter of minutes.

Ever since the price cap on fuel was announced in Hungary, “gas tourists” from Slovakia, which has substantially higher gas prices, have been coming across the border to fill up their tanks.

[Magyar Hang]

Government extends gasoline price cap for another three months

picture of Hungarian gas station

The government will extend the “price stop” on fuel for three more months, ending on May 15. The measure was announced by Viktor Orbán in his annual assessment of the year speech, and shortly afterwards also announced by the government on Facebook.

The legislation, which capped the price of regular gas and diesel per liter at 480 Ft. (US $1.53), took effect on November 15 and was planned to expired on February 15.

In his speech assessing the year, Prime Minister Orbán spoke about the government’s policy of four “stops” that have been implemented as inflation-fighting measures: utility costs, fuel prices, interest rates on floating mortgages, and the prices of certain consumer goods.

[444]

Hungarians want lower taxes instead of a price cap on fuel

picture of person pumping gas

A recent poll shows that 63% of Hungarians would prefer to combat high fuel prices by cutting taxes instead of setting a price cap on them.

According to a Pulzus Research survey commissioned by Napi.hu, the majority of respondents agree that the government should do something about the rising cost of fuel, but the vast majority of them would not achieve this by putting a maximum price on it.

The government set a maximum price for 95-type gasoline and diesel at 480 Ft. (US $1.55) per liter on November 15, although premium fuel can be sold at a higher price. The measure is valid until February 15, and Chancellor Minister Gergely Gulyás said in last week’s Government Information briefing that a decision would be made about extending it before it expires.

26% of respondents in the Pulzus Research poll want to extend the policy for another three months, while 14% would prefer a solution that has not yet been considered: offering a discounted fuel coupon for needy consumers. This policy could apply to those for whom public transportation is not a viable option, for example, and it would be difficult for them to get to work without a car.

Only 8% do not want to extend the price cap policy, and 11% are not sure what the solution would be.

The Pulzus Research survey polled 1,000 people, with the results representative of the opinion of the Hungarian adult population. The data reflects the opinion of those over 18 years of age with respect to the demographics of the Hungarian population, balanced according to gender, age, education, and type of settlement.

[Telex]

Filling stations closing due to gov’t mandated price cap on gas

picture of MOL station

Three gas stations had to close last week due to the government’s price cap set on regular gasoline nearly three months ago, according to analysis published on Holtankoljak.hu. If the price of Brent oil continues to rise and the government maintains the price cap policy after February 15, even more gas stations could close.

The price of Brent oil is rising due to several factors, says the site. It also didn’t help that the Antwerp oil center, Europe’s largest oil hub, was hit by a cyber attack last week. The price per barrel has already passed $90, and analysts said that the price could soon reach $100 a barrel and not come down.

The site added that gas stations were now waiting for the government to determine what will happen after February 15. If conditions remain as they are at present and gas stations are not compensated for the loss of revenue, supply problems could even start occurring.

On the positive side, the forint strengthened last week, with the exchange rate against the dollar now at around 310 forints. Although this may put a brake on further price hikes, global market developments will likely prevent any significant drops in the price of oil, they wrote.

The price of Brent per barrel rose 4% last week, with the current price hovering around $92.78 per barrel.

[Index]

Hungary’s price cap on fuel leads to “gas tourism”

picture of man filling up car

With the government capping the price of regular gas and diesel oil in Hungary, Index writes about the phenomenon of “gas tourists” coming to the country from across the border.

Visitors from Slovakia can save up to 70 Ft. (US $0.21) per liter, writes the news portal, while Austrians can save 20-40 Ft. (US $0.06-$0.12) when refueling in Hungary. This means Slovakia “gas tourists” can save around 3,500 Ft. (US $10.64) on an average 50-liter full tank, while those from Austria can save a thousand forints or two when filling up in gas stations located in Hungary.

“You can tell that there have been more cars with Slovak license plates stopping to fill up lately compared to before. Gas and diesel are more expensive over there, so they are taking advantage of the opportunity to get it cheaper here,” a filling station attendant told RTL Híradó.

The Hungarian government announced on November 11 that it would cap gasoline prices at 480 Ft. (US $1.46) for three months, starting on November 15. According to the regulation, petrol stations that do not comply with the rules may be subject to fines and closures.

[Index]

Political opposition responds to the government’s decision to cap gas prices

picture of gas pump

According to the opposition, the government’s announcement of a cap on regular gas and diesel prices at 480 Ft. (US $1.50) per liter will not compensate the population for the combination of high inflation and a weak forint, reports Azonnali.

Minister Gergely Gulyás announced at a Government Information session that the price cap would apply for three months starting on Monday, and that it would force the closure of gas stations who do not comply with the new regulation.

Azonnali notes that Prime Minister Viktor Orbán told Kossuth Rádió two weeks ago that capping gas prices would be a risky move as it could cause disruptions in the market, and that share prices in state oil and gas company MOL did indeed fall after the news was announced.

Sándor Burány from the Hungarian Socialist Party (MSZP) told the news outfit that “capping gas prices only treats the symptoms.”

“The government is only remedying what it has partially caused, since a 27% VAT and weak forint are responsible for gas prices in addition to global market trends, and it can do something about those,” he said.

Burány believes that the government should address overall inflation, and that since cooking oil, like fuel, has seen price hikes of 30%, the government would be justified in capping that as well.

MSZP’s press department also told Azonnali, “we have said many times in recent days that the price of petrol is unsustainable and that immediate government intervention is needed. The Fidesz government has finally realized that we are right, we do not know what took them so long to make a decision.”

In a video uploaded to social media, Jobbik President Péter Jakab said that the party had demanded for weeks that a price cap and cut on the excise tax on gas be implemented. Now, “the government has backed down,” he claims, although the party still demands at a temporary suspension of the 27% VAT and gas excise tax.

Hungary’s Green Party, LMP, “does not in any way consider the price cap regulation on fuel prices to be a sustainable solution in the long run.”

According to LMP, “the current government, or rather the next government,” should work out a sustainable solution “by developing public transport, reducing the use of fossil fuels, and developing differentiated support systems that take account of need.”

[Azonnali]

Government: Gyurcsány is responsible for Hungary’s high gas prices

The government is claiming that gas prices are currently over 500 forints per liter because of the actions of the previous Socialist, Ferenc Gyurcsány and Péter Medgyessy-led government, reports 444.

Responding to a question by ÁTV Híradó, the Governmental Information Center claims that the current government has little room to move because “during EU accession talks with the European Union in 2004, the left-wing (Medgyessy-Gyurcsány) could have asked for a more favorable agreement” exempting Hungary from tax obligations, but that it did not do so.

The information center added that Hungary was the only country in the EU that reduced fuel taxes this year, with a 10 forint per liter reduction on gas oil and 5 forint per liter on gasoline introduced on April 1.