Even though petrol prices have been steadily increasing by small amounts in the past months, Hungary’s prices are still sky high compared to other countries in the region. Especially in the case of petrol: in Romania, for example, a litre of petrol is now HUF 100 (EUR 0.27) cheaper than in Hungary. What is the reason for this?
Petrol is the most expensive in Hungary
The difference between the price of petrol in the region’s countries keeps increasing. According to recent data, the average price of petrol is currently HUF 611 per litre. Although this is a decrease of more than HUF 25 compared to the beginning of the year, it is still the highest price compared to neighbouring countries, RTL Híradó reports. Diesel is only more expensive in Serbia and Austria than in Hungary.
“In the Hungarian market, it seems that the demand for both petrol and diesel has decreased quite significantly. The market is really waiting for a pick-up in sales and for the petrol stations to be able to sell volumes,” Eszter Bujdos, managing director of Holtankoljak.hu, told RTL Híradó.
VAT is high, excise duty is low
According to a recent report from the Hungarian central bank, although Hungary has the highest VAT rate, excise duty is below the EU minimum. The reason for the higher price, they say, is the high margin. In other words, oil traders are making a bigger profit. The central bank calculates that the margin was HUF 170 per litre of petrol in February, compared with an average of HUF 102 in several countries in the region.
An Erste analyst said earlier that after the abolition of the fuel price cap, fuel retailers doubled their profit between the purchase and selling price.
The CEO of MOL, the largest trader, said that their costs had also increased significantly, but they could not build that into the price during the price freezes. “Well, the petrol price stop cost MOL a lot of money, please accept that,” RTL Híradó quotes Zsolt Hernádi as saying.
It cost MOL a lot of money… but the company made its highest profit last year
In 2022, MOL achieved the highest profit in its history: a net profit of HUF 628 billion in one year. One of the main reasons for this was that the company made record profits on Russian oil bought at a lower price than the world market price.