How fuel prices in Hungary could be cut more predictably

Prime Minister Viktor Orbán has today—much like in 2021—imposed a price cap on fuel in Hungary once again. The measure is temporary, but fuel prices could be reduced in a more predictable fashion if the government had the will to do so.

Alternative ways to lower fuel costs

Following the Prime Minister’s announcement today, the familiar price ceiling on fuels has been reintroduced. Under its terms, petrol may not exceed 595 forints per litre, while diesel is capped at 615 forints. According to holtankoljak.hu, 95-octane petrol currently stands at 585 forints per litre, and diesel at 629 forints. That means petrol could still rise in price, but diesel has hit its limit.

Price caps—roundly condemned by experts—are no stranger to Mr Orbán’s governments. When introduced in 2021, they primarily harmed smaller petrol stations rather than the majors. As hvg.hu reports, there are other ways to bring prices down.

For one, fuel in Hungary is burdened by excise duties higher than the EU minimum. A further rise is expected in July, but in the meantime, the rate could be cut from 158.8 forints to 139.7 forints per litre for petrol, and from 148.76 forints to 128.4 forints for diesel. That would moderate pump prices by roughly 20 forints per litre.

Fuel is taxed at a country’s highest VAT rate under EU rules—a hefty 27% in Hungary. If there were political intent, the entire VAT scale could be lowered, reducing the tax take from fuel accordingly. At present, tax revenues amount to a substantial 8,793 billion forints (EUR 22.2 billion). Even a 1% cut could inflict a significant shortfall on the central budget, which doubtless explains the government’s reluctance.

Péter Magyar called for a harsher fuel price freeze

Péter Magyar and his Tisza Party have topped the opinion polls since November 2024, giving them a strong chance of defeating Mr Orbán and Fidesz on 12 April. Yet Tisza’s manifesto contains no specific pledge to cut VAT on fuel. Mr Magyar’s team recently floated tax cuts or a petrol price freeze (at HUF 480/l), though they offered no details on how they might manage fuel pricing.