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Tag: gas stations

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]

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]

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]

Serious sanctions for gas stations who refuse to comply with new price cap on fuel

picture of MOL gas station

With the price of 95-octane gasoline and regular diesel set to be fixed at a maximum of 480 Ft. (US $1.50) on Monday for three months, details have been announced for gas stations that fail to comply with the new regulations.

According to the Official Gazette, “gasoline stations have to remain open, and cannot close on their own. But they will be required to close if they do not sell their designated fuel for a period longer than two days.”

The gazette also states, “the operator of the filling station is obliged to announce a shutdown if it is unable to serve consumers its products according to the Price Regulation within a period of 7 days during its normal operating hours, for a total of 48 hours. The operator of the service station may not declare a shutdown for any other reason.”

In addition, no other commercial activities may be carried out at the filling station during this downtime, nor may it be open for a shorter period than usual.

Stations that do not comply with the regulations can expect sanctions. A fine anywhere between 100,000 Ft to 3 million Ft., (US $312 – $9,356) can be levied with no possibility of appeal, and repeat offenders may be barred from operating their service stations for up to half a year.

If a gas operators are banned from running their filling stations, a registered service provider within a 30km radius will be designated to “meet the needs of residents.” In this case, both the building and tangible assets of the gas station will be transferred to the newly-designated service provider, who will also be permitted to sell the products offered at the station it has assumed.

[Telex]