Panic at Hungarian gas stations due to fuel supply hoax
The last couple of days saw mass hysteria and ramping panic buying at Hungarian petrol stations, which were triggered by the fake news that the price cap would end at midnight on 2 December. Huge crowds of people flooded the gas stations on Friday afternoon in hopes of getting fuel for a price of HUF 480 (EUR 1.16).
According to RTL.hu, long queues formed at gas stations on Friday afternoon, when the news broke out about the end of the price cap. However, it all turned out to be false. According to recent reports, the government extended the fuel price cap until 31 December. The hoax rapidly caused nationwide fuel shortages so many people were left with empty tanks for the weekend. The distressed customers would drive from station to station in the bid to find a few drops of petrol but their efforts were mostly in vain.
Hungarian refinery in trouble
Gergely Gulyás, the current Minister of the Prime Minister’s Office, stated that if the Hungarian refinery, MOL, was unable to provide a sufficient amount of fuel supply then the government would have to take further action. He said that
the situation was rather worrisome as the country was about to face a serious fuel crisis
unless immediate changes were made. There was no clear answer from MOL as to whether they could ensure a sufficient fuel supply. They replied though that all of their employees were working on the issue in full swing.
- Read also: Severe oil shortage hitting Hungary soon?
Further Complications
Although Hungary was exempted from the Brussels oil sanctions, certain factors further complicate the situation. The above-mentioned sanctions will enter into force at the beginning of December and will prevent countries from trading Russian oil among themselves. This means that not even MOL’s refineries in Százhalombatta and plants in Bratislava are allowed to do business. Russian threats to stop fuel deliveries, which would force Hungary to switch to sea transportation, are posing an additional hazard.
Ending the price cap
The problem with the fuel price cap is that it creates supply chain issues because no one is selling fuel as cheaply as MOL does, so the whole process becomes unsustainable. According to energy experts, the price cap should have been abolished a long time ago to maintain the stability of the country’s supply.
Read alsoFuel will become 25-30 percent more expensive for a lot of people in Hungary from January 2023
Source: rtl.hu, portfolio.hu
Diesel is the problem, petrol 95 is ok but as the boss old Vic wants is unrest in Hungary. All caps and price freeze should be lifted and a norm of life begin in this country.. and ambiguous press releases from this goverment should stop too..western prices in the shops yet average Hungarians do not earn western eu wages.. oh what a wheel it all is.. highest vat in the eu and lowest min wage .. this country is taxing it way out of the issue yet letting big buisness off the leash.. why do I keep living here.. sorry.. oh it is Brussels fault sorry maybe I should add that.. (it isn’t). There by the grace of god go I..
The VAT issue is complicated. Is direct taxation better than indirect taxation? Indirect taxation (VAT) definitely affects people on lower incomes disproportionally. But on the other hand, people I speak to here (relatives, friends) all like the flat rate income tax of 15%, which disproportionally favours people on higher incomes. Add to that the very low Personal Allowance (the amount one can earn before paying income tax) the income tax system is quite punishing for some. It seems to me that the high VAT rate is what finances the low income tax rate (15% is very low by European standards) for the better off. In most countries there are tax bands so the higher paid people pay more income tax. Not so here and not very fair.