Hungarian government made an important decision about the fuel price cap!

According to a lately published government decree, the Orbán administration increased state support for small fuel stations from HUF 10 billion (EUR 25 mn) to HUF 18.5 billion (EUR 47 mn). That shows the government is not likely to end the fuel price cap in Hungary.

The Hungarian government introduced the fuel price cap in March, maximizing the price of 95 RON petrol and non-premium diesel at HUF 480 (EUR 1.2) per litre. Many thought that the decision was just an additional tool to garner votes for the coming general elections. But it remained in effect even after Orbán’s fourth consecutive landslide victory.

A lately published government decree has significantly increased state support for small fuel stations financially suffering due to the price cap. Therefore, 168 óra wrote that the price cap would remain in effect in Hungary even though the finance minister said a couple of days ago that the scheme would not be sustainable in the long run.

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Budget deficit is still very high

Hungary’s cash-flow-based budget deficit, excluding local councils, came to HUF 2,892.3 billion (EUR 7.2bn) at the end of June, the Finance Ministry confirmed in a detailed reading of data on Friday.
The deficit widened from HUF 2,737 billion at the end of May. The full-year cash-flow-based budget deficit target is 3,152.7 billion.

The central budget deficit came to HUF 3,040.7 billion, while social security funds were 26.8 billion in the red, while the separate state funds had a surplus of 175.2 billion. The ministry noted that revenue from tax and contributions grew by an annual 13.5 percent in January-June. Revenue of budget-funded institutions, payments related to state-owned assets and revenue from European Union programmes were also higher than in the base period, it added.

• Read also: Infringement procedure against Hungary to start due to fuel price cap

“In the current, unpredictable global economic environment, the result of the protracted Russia-Ukraine war and sanctions by Brussels, the government’s goal remains clear: to preserve Hungary’s stability, and to protect the utilities price cuts, family support, pensions and full employment,” the ministry said.

“Additionally, maintaining disciplined fiscal policy is of key importance. To that end, the government is standing by its 4.9 percent budget deficit target for this year and will continue to reduce the public debt,” it added.

(HUF 100 = EUR 0.2490)

Source: 168 óra, MTI