Hungarian petrol stations could close down rapidly due to the extended price cap
Back on November 15th last year, the Hungarian government introduced a fuel price cap in order to mitigate the rapidly growing prices of both diesel and petrol in Hungary.
Not so long after the introduction of the measures, Viktor Orbán said that over 80% of Hungarians agreed with the fuel price caps. He commented that “one must not sit idly when prices go sky high”.
Thanks to the government’s decision to cap retail petrol and diesel prices at HUF 480 (€1.30) per litre, the price of fuel has become the lowest in Hungary among European Union countries.
Originally, the fuel price cap was set to be expired on February 15th, and many people speculated that the price of petrol would skyrocket once the cap is lifted. Recently, it has been extended until July 1st.
However, the capping of retail fuel prices has pushed many petrol stations to the brink of bankruptcy, and they started to introduce limits on how much fuel people could purchase. Other places straight up asked customers not to fuel up at their station because they had a loss from having to purchase fuel for more than the capped price of €1.3. Some even found a way to close down their stations for a short while to mitigate losses.
The government’s response was to also cap the prices of both diesel and petrol at wholesale levels, which has led to the withdrawal of 30% of wholesalers, leaving only the Hungarian-owned MOL to supply fuel in Hungary.
Index reports that on Wednesday, Viktor Orbán announced the extension of the validity of the fuel price cap until July 1st, along with the price caps on several food items, to try and mitigate the effects of worldwide inflation and the economic crisis on ordinary Hungarian people.
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However, Gábor Egri, the chairman of the Független Benzinkutak Szövetsége (FBSZ), which roughly translates to the “Association of Independent Service Stations”, told Index that
“If we do not receive any kind of support, then after July 1st, small and independent petrol stations will close en mass because they are already in a tough situation and on the brink of bankruptcy”.
168 also reported that the chairman said that it can no longer be sustained that entrepreneurs with families have to ensure cheap fuel prices for over 3 million motorists.
Gábor Egri, the chairman, thinks that small retail petrol stations would need approximately HUF 40 (€0.105) per litre of support to be able to bounce back.
“According to our information, to this day, 500 companies have submitted their application for subsidies to the Ministry of Innovation and Technology (ITM). These are the companies that have requested a subsidy of HUF 20 (€0.057) per litre,” FBSZ’s chairman told 168.
He told Index that while they founnd the price stabilisation acceptable and necessary, this was unethical and socially unacceptable.
Source: Index.hu, 168.hu