Petrol price caps cancelled in Hungary due to Brussels sanctions

Two days after the sanctions on oil went into effect on Monday, the Hungarian government cancelled the price freeze on petrol upon recommendation by the Hungarian oil company MOL, Gergely Gulyas, head of the prime minister’s office, announced late Tuesday evening in Budapest.

ECONOMY DECEMBER 7. 2022 12:27

The price caps on petrol and diesel were removed from 11 pm on Tuesday. After the cancellation, the price of petrol at MOL stations will be around 641 forints (1.54 euros) per litre, whereas that of diesel will be around 699 forints (1.68 euros),

came the announcement by Gergely Gulyas, the minister leading the prime minister’s office, late Tuesday evening in an extraordinary government press briefing, also attended by Zsolt Hernadi, president and CEO of the Hungarian oil company MOL. Although Hungary successfully fought against the sanctions and got an exemption, “what we feared has happened,” Mr Gulyas said. Disturbances occurred in Hungary’s fuel supply, as supply cannot be ensured without imports. We can no longer guarantee the 480-forint (1.15-euro) price cap on fuel for Hungarian families, the minister declared.

An unprecedented crisis situation has developed in the country in the past few days, said MOL CEO Zsolt Hernadi. Petrol and diesel were not available in a quarter of the filling stations, something that has never happened before, he said. So far this year, 2.2 billion litres of fuel have been sold, compared to 1.5 billion last year. More than 500 million litres of fuel have been sold in the past few days alone.

871 orders had to be cancelled, Mr Hernadi pointed out. The situation became critical, demand skyrocketed and panic set in. “MOL could hold up until now,” the CEO said. They are doing their utmost to ensure supply, and are also working to ensure that the Danube refinery can operate at full capacity, he added.

It has now become clear that the solution to a normal supply balance is to restore imports as soon as possible,” Mr Hernadi stressed. The role of the price freeze was clear: to contain the spiralling energy prices. It is not good if something is expensive, Mr Hernadi said, adding that Hungary’s supply cannot be jeopardised, and that MOL will work hard to calm the chaos. However, it will take a month and a half to reach the usual stability.

Although the market will normalise, there may still be some disruptions, but the panic-buying wave will not occur again, he added.

In response to a journalist’s question, Zsolt Hernadi also said that the government had released strategic reserves to get through the summer period, and supplies were guaranteed throughout. Introducing the price cap was in the interest of Hungarian families, as the country was the only one in Europe to keep prices exceptionally low for thirteen months, Gergely Gulyas said.

“MOL sent a clear letter to the minister of energy yesterday, and we could not wait any longer,” the minister recalled. He stressed that for 13 months Hungarian families paid the lowest prices in Europe for fuel, highlighting the success of the government’s measures.

ECONOMY

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Hungary, mol, oil, petrol, price