Here is why fuel is so expensive in Hungary and when it will change

After the abolition of the fuel price cap in December, fuel prices in Hungary have been the highest in the region by a large margin. The Hungarian central bank (MNB) recently published an analysis on this topic. In their paper, they examine the cost structure of fuel prices, with a particular focus on the evolution of margins above taxes and costs.

Why is fuel so expensive in Hungary?

While Hungary has the lowest import prices in the region thanks to Russian supplies, fuel prices in Hungary are particularly high compared to the rest of the region, Portfolio writes. As a recently published study by the MNB points out, the cost structure of fuel prices can be divided into three main groups:

• the world market price of crude oil, expressed in forints;
• the tax burden reflected in the final consumer price of fuels;
• the margin resulting from the difference between the consumer price and the cost of raw materials.

According to the MNB study, there is no marked difference between the situation of domestic and regional countries with regard to the first two factors.

According to the MNB study, there is no marked difference between the situation of domestic and regional countries with regard to the first two factors.

• Read also: This is why fuel in Hungary is the most expensive in the region

According to the report, one of the reasons for the high domestic fuel prices is the significant margin over raw material costs and product taxes in the domestic fuel price bank.

This item includes the cost of:

• petroleum refining,
• wholesale trade,
• retail trade and
• transport,
• and other cost factors and the profit generated by all these.