Is there a gasoline crisis coming in Hungary?
The price cap introduced by the Hungarian government, which was first applied in November last year, has been extended from 15 February for another 3 months. Based on this regulation, petrol cannot be sold at a price higher than HUF 480 (EUR 1.35). However, based on the world market price of petrol, a higher price would be charged in Hungary as well. The resulting loss would have to be absorbed by the filling stations, which is causing them more and more difficulties. There is already a petrol station in Eastern Hungary where a car can refuel only 10 liters at a time. Is there a gasoline crisis coming?
Loss on every liter of petrol
Some operators did not want to make a statement in the television report, but based on the inscriptions displayed at the gas stations, it turns out that some lose 8 forints for every liter sold, which is already a serious minus. Another owner gave an interview, saying he is likely to lose one of his two gas stations as he will not be able to pay off his bank loans because of the price cap, says 444.hu.
And at a third gas station, sales have been limited, with only 250 liters of petrol sold in a day, so that the resulting losses can still be managed and the owner can avoid going bankrupt.
Now 50, but soon hundreds of petrol stations introduce restrictions or close down?
Currently, roughly 50 gas stations have announced some kind of restriction. However, if the price of oil continues to rise on the world market, a much higher number is projected. With hundreds of stations announcing restrictions, or simply closing down, experts say that it can occur that every 2nd gas station will be affected.
The government is unlikely to help avoid the gasoline crisis
It does not seem likely that the Hungarian Government will assist the gas station networks. The current price cap is also a clear political decision. The Hungarian government aims to improve the impact of inflation before the Hungarian parliamentary elections, which will take place in less than 2 months, at the beginning of April. However, the even bigger problem will come when the current price cap is over because then it will be difficult to go back to the old conditions: the world oil price may increase even further by summer and it will be complicated to explain that to people. When the price cap regulations are done, the price of petrol can reach up to HUF 700 (EUR 2) in Hungary, by the summer of 2022, writes forbes.hu.
Source: 444.hu, forbes.hu
1 Comment
All the government has to do is reduce the fuel duty it charges. The bulk of the price of a litre of petrol is tax.