Hungarian agriculture on the brink of collapse due to fuel shortage?

Back on November 15th, the Hungarian government had ordered to cap the retail price of fuels in Hungary. This measure was extended an additional three months on February 23^rd.

Fuel cap

Additionally, the government had ordered to also cap the wholesale price of fuels in Hungary at 480 forints (€1.3) per litre. This, and the depreciation of the forint as a currency compared to the euro, has made it so that

last week, the Hungarian price of fuels measured in euro was the lowest in all of Europe, Portfolio writes.

However, as we previously reported, while some officials of both MOL and the Hungarian government said that there is no shortage of fuel in the country, only localised logistics and supply issues, people in several locations around Hungary swarmed gas stations, created queues of hundreds of metres, and eventually drained many stations of their reserves.

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At border-towns, like Sopron, neighbouring countries’ citizens would often cross the border to stock up on fuel at a much lower price thanks to the price cap the Hungarian government enacted.

Problems in agriculture

Since then, the situation has not yet been resolved, and to make matters worse, the National Association of Agricultural Cooperatives and Producers (MOSZ) called on the government to prioritise providing fuel at the capped price for agriculture workers.

The problematic supply chain and the fact that producers have to purchase fuel at a price of 600-700 forints (€1.58-1.84) per litre can lead to an agricultural crisis in Hungary.

Hvg wrote that, according to MOSZ, producers do not always receive the fuel they ordered because MOL Group, referring to difficulties in the supply chain, sometimes does not serve them.

“Agricultural work was halted at several producers’ lands. However, agriculture is not a field where, if people do not finish their work, it can be done three weeks later. This measure is seriously endangering the safety of Hungary’s food supply,” the association added.

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According to Hvg, many producers are simply unable to fill up at fuel stations since a lot of agricultural vehicles cannot even go on public roads.

The National Association of Agricultural Cooperatives and Producers (MOSZ) asks the government and MOL Group to prioritise solving the supply and fuel price issue of Hungarian agriculture because not doing so could cause shortages of grains.

Hvg has updated their article with the answer of the Hungarian MOL Group, which stated that they are currently working on solving the supply issues, adding that there is enough fuel in the country since their refineries are operating at full capacity.

They are trying to ship fuel orders, and buyers can even contact third-party transport companies, even if their contracts did not include this option.