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Huge increase in expenditure, will Budapest’s public transport collapse?
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The Hungarian government is subsidising personal car use with a huge fuel price cap. However, public transport companies are struggling to cope with the soaring energy costs. Taxi drivers can fill up at a reduced price, but hauliers and company cars cannot. Could rising costs bring Budapest’s public transport to a standstill?
Controversial regulation
Chancellor Gergely Gulyás said that it would be nice if everyone in Hungary could get free fuel, but as we were an energy-poor country, this was not possible. Most recently, the Hungarian government has further reduced the number of people who can fill up at reduced prices.
Currently, the difference between the official price and the market price is HUF 200 (EUR 0.51) for petrol. For gas oil, it is HUF 260 (EUR 0.66). For a 40-litre tank, there is a state subsidy of between 8,000 (EUR 20.32) and HUF 10,000 (EUR 25.41). There was a time when it was even more. In June, the market price of petrol was around HUF 800 (EUR 2.03), while diesel was even more. As a result, the state expenditure was even higher.
Moreover, it is done without taking into account any social or life situation considerations when supporting the motoring public. A well-off single person living in the centre of Budapest receives the same amount of subsidy per litre of fuel as a single person with a large family living in the countryside, hvg.hu reports.
In general, the more fuel you buy, the more subsidies you receive. As a result, fuel consumption is breaking records. According to the Hungarian Mineral Oil Association, “in the first half of the year, 748 million litres of regular motor gasoline were consumed, 47 percent more than in the first half of 2021.”
Read alsoSpeed limits may apply in several Budapest districts!
Budapest transport in trouble
However, public transport vehicles are refuelling at market prices. Moreover, public transport is being hit not only by the increased fuel prices, but also by rising electricity prices. A large proportion of vehicles, including trolleybuses, trams, metro trains and some trains, are electrically powered. The severity of the situation is clearly illustrated by the Budapest Transport Company (BKV). BKV’s costs doubled in the first half of the year compared to a year earlier.
