Drastic surge in fuel prices to come in Hungary from autumn

Motorists can expect to pay more than HUF 600 (EUR 1.59) for fuel this autumn. This will be influenced mostly by the increase in excise tax and the expected weakening of the forint.

Drastic increase in fuel prices soon

According to a recent forecast by GKI Gazdaságkutató Ltd., the price of a litre of fuel will rise to over HUF 600 (EUR 1.59) by the autumn. Next year, the average price will be HUF 650 (EUR 1.72). GKI also expects the forint to weaken and the excise tax to rise. Motorists will have to pay HUF 41 more tax per litre next year, rtl.hu reports.

The excise tax increase was voted by the governing majority in Parliament on Tuesday. Moreover, according to the GKI, the single-digit inflation in December could reach double digits again in January, precisely because of the rise in fuel prices.

Right now, the average price of petrol is HUF 574 (EUR 1.52) per litre, while diesel is HUF 561 (EUR 1.49). This is roughly 20 percent higher than a year ago, when there was a price freeze on fuel.

Why increase the excise tax?

A week ago, the government submitted a draft proposal to increase excise tax on fuel. The Orbán government has argued for common EU rules. Meanwhile, the increase of HUF 41 per litre is almost double what would be mandatory. Why, Gergely Gulyás, the PM’s chief of staff, explained two weeks ago:

“We are already around the minimum level. So with the current increase we are still around the minimum level set by Brussels.”

GKI expects fuel prices to rise this autumn, as they believe oil prices could rise and the forint weaken. They say inflation could also fall below 10 percent in Hungary by December. However, they believe that the first few months of next year could see money depreciation jump back above 10 percent due to expected fuel price rises.