Fuel: extraordinary demand in Hungary, shortage to come soon?

The fuel price cap is now leading to extraordinary demand at petrol stations. We have not seen such demand since the bounce-back from the pandemic. Can this unprecedented demand lead to a lack of petrol in Hungary? Continue reading below for more information.

People bought more petrol in May this year than in August 2019, writes Napi.hu. That is when most people typically fill up. Gasoline consumption in March topped 400,000,000 litres, an unprecedented level. The state pockets HUF 263,000,000,000 (EUR 650,000,000) from excise duty on fuel alone in the first 5 months.

Hungarians and fuel price cap

When the Hungarian government decided to cap fuel prices in November last year, the gap between market and official prices were not yet large enough to attract fuel tourists in droves. In the weeks following the decision, market prices were still below HUF 480 (EUR 1.20). However, after the outbreak of the war, things took off, as oil prices began soaring and the border wells became very attractive to foreigners, who were also happy with the weak Hungarian currency.

Statistics also reflect this: according to the NAV, the petrol turnover of domestic gas stations rose by 31 percent year-on-year in March. This is a very high figure, with a bigger increase only in April 2021, but then it was due to the low base caused by the epidemic. The 19.3 percent surplus in April and the 10.3 percent surplus in May are also unusually high.

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Hungarian petrol and diesel consumption

In May, 189,600,000 litres of petrol were consumed, which is more than the peak summer season of August 2019 (186,200,000 litres). By now, the 12-month rolling (current and previous 11 months’ data) Hungarian petrol consumption is massively above 2,000,000,000 litres, which is unprecedented. It is, however, inevitable that inflation and the exclusion of foreigners from the official price will reverse this momentum later in the year.

For diesel, the change is even more spectacular, if possible. In March, consumption rose by almost 36 percent, followed by a 21 percent and 28.4 percent year-on-year surplus. In the 12 months ending in May, more than 4,000,000,000 litres of diesel were consumed, an unprecedented figure in Hungary.

Could all this lead to a fuel shortage?

The current fuel supply situation is very sensitive in several respects, says Portfolio. Seeing as a significant part of domestic imports have been lost, summer is a high-traffic period. Demands will increase by 30-40 percent after the start of the holidays, says Péter Ratatics, managing director of Mol’s Hungarian operations. The expert added that the price cap distorts the market and leads to abuses, which is why government measures such as the gasoline tourism crackdown announced in May are important.