Breaking: Fuel tax to be increased in Hungary

A steep excise tax hike is expected to come next year. What does this mean, how much more expensive will fuel get because of this? One thing is sure though: motorists are certainly not going to be happy.

Excise duties on fuel and energy will increase according to the government’s tax plan for next year. The reasoning is that this is necessary because it would risk EU infringement proceedings if the prices of these two fundamentals were set lower than EU levels, hvg.hu reports.

The government applied for a derogation to increase excise duty in December last year, but the European Commission appears not to have accepted it.

According to hvg.hu, the draft tax package includes the following rates:

• The excise duty on petrol will rise from HUF 120 (EUR 0.33) per litre to HUF 152.55 (EUR 0.41) if the world price of oil is more than USD 50 per barrel. If the world oil price remains below USD 50 per barrel, the excise duty will increase from HUF 125 (EUR 0.34) to HUF 157.55 (EUR 0.43).
• The excise duty on kerosene could rise from HUF 124.2 (EUR 0.34) to HUF 152.55 (EUR 0.41) above the world oil price of USD 50 per barrel, and from HUF 129.2 (EUR 0.35) to HUF 157.55 (EUR 0.43) below USD 50.
• The tax on diesel will rise from HUF 110.35 (EUR 0.30) to HUF 142.9 (EUR 0.39) per litre above the world oil price of USD 50, and from HUF 120.35 (EUR 0.33) to HUF 152.9 (EUR 0.42) below USD 50.

The excise duties on several other energy products were already raised in last year’s government decree on special taxes. However, then they were called excess profit taxes. Now the tax rate of that time will remain, only now it will be written into law. Thus, it will not be “excess profit tax” after this, but the normal tax rate, hvg.hu explains.

How expensive will this make fuel for us?

If the excise tax on fuels is indeed raised to the extent proposed in the 2024 tax package submitted on Tuesday, then

fuel prices in Hungary will increase by an average of HUF 40-41 on 1 January,

Ottó Grád, secretary general of the Hungarian Mineral Oil Association, told Pénzcentrum. Although the excise duty itself will rise by only HUF 32, 27 percent VAT will also be added, which will mean an extra HUF 8.8.