Fuel price drama in Hungary: Experts’ outlook & Hungarian government’s possible next move revealed

At the beginning of the week, reports surfaced of fuel price hikes, drawing attention as Minister of National Economy, Márton Nagy, had consultations with MOL and the Hungarian Association of Petroleum (MÁSZ) regarding these rises. An energy policy expert hinted at the possibility of the government employing robust measures in response.

According to holtankoljak.hu, the wholesale prices for petrol and diesel are set to decrease from Friday onwards. Petrol will see a reduction of 3 HUF (EUR 0.0077), while diesel will become 5 HUF (EUR 0.013) cheaper for petrol stations. Consequently, average prices from the 12th of April will stand at 641 HUF/litre (EUR 1.65/l) for 95 petrol and 653 HUF/litre (EUR 1.68/l) for diesel.

Nevertheless, there is a possibility of further price cuts being curtailed, as the wholesale price of petrol is expected to rise by 3 cents gross, while for diesel, the pump price to wholesalers will rise by 6 cents gross starting today.

According to Erste’s analysis, there might be another price cap. However, there are speculations that Minister Márton Nagy might opt for a voluntary reduction in prices. Such action could potentially yield short-term negative effects on MOL, the Hungarian oil and gas company.

Experts’ reaction to fuel price changes

Looking ahead, Századvég’s energy policy expert Oliver Hortay underscores the significance of the trajectory of geopolitical conflicts. He stresses three main factors:

• Firstly, attacks on Russian oil refineries by Ukraine and events in the Middle East are key reasons behind recent rises in oil and fuel costs. Should these conflicts escalate, it could elevate geopolitical risks, while de-escalation might temper prices.
• Secondly, forthcoming decisions from the OPEC oil cartel will come into play. Influenced by geopolitics, alongside market fundamentals like rising prices and projected demands, there’s a growing justification for relaxing quotas, which could impact global oil prices.
• Lastly, several remaining elements could influence Hungary’s fuel price situation. These include Russia’s efforts to resolve its price disparity with Western oil, ongoing increases in transportation expenses from countries such as Croatia and Ukraine and the volatility of the forint against the dollar.