Extraordinary fuel price decrease in Hungary from Saturday

Extraordinary fuel price decrease will happen in Hungary on Saturday, Hungarian press wrote on Friday. It is extraordinary because such measures are regularly implemented on Wednesday and on Friday.

According to holtankoljak.hu, fuel prices will change in Hungary on Saturday in favour of the consumers. The reduction concerns both gasoline and diesel prices. The former will decrease by HUF 4 per litre, while the latter by HUF 8. At least fuel stations will have to pay that much less for fuel. But holtankoljak.hu highlights that a reduction in purchase prices does not necessarily mean a reduction in official gas station prices.

The new prices will be the following from Saturday:

• Gasoline type 95 average: HUF 608/l (EUR 1.53)
• Diesel: HUF 618/l (EUR 1.55)

According to Világgazdaság, in a regional comparison, gasoline price is the highest in Hungary in Central Europe. In the case of diesel, only Austria precedes our country. According to the European Council, the difference reaches approximately HUF 50 per litre, which is considerable.

• Read also: Fuel will be Europe’s most expensive in Hungary?

The website argues that fuel prices are defined by three main factors: the price of crude oil on the world markets, the tax rate, and the distributor margin. Hungarian refineries use Russian Ural oil, which is cheaper than the Brent type. However, the government takes away 95 percent of the ‘excess profit’. The national tax rate is average in a regional comparison. Tax reaches 40 percent of the diesel and 42 percent of the gasoline prices, but that is the second lowest after Romania. The VAT is the highest in Hungary in the EU, but the excise tax is the lowest.

Világgazdaság says that the reason behind the very high Hungarian fuel prices is the huge margin of the distributors. In that aspect, Hungary leads the region. The margin rate in Hungary started to increase last March and reached 28 (gasoline) and 34 (diesel) percent by the end of last year from 20 and 22 percent. Világgazdaság argues that the fuel price cap helped that process a lot. But decreasing the margin will be difficult and take a long time.

• Read also: Hungarians are flocking abroad to buy fuel

Source: holtankoljak.hu, Világgazdaság