Hungary’s price caps put immense pressure on petrol stations

Limitations on how much fuel you can get for the capped price are becoming more and more extreme. The price caps are putting immense pressure on petrol stations and as a result, they can barely keep up with demand. According to the government’s response, price caps can only stay if some conditions are met. The situation has worsened over time and it seems it has reached its breaking point.

In Hungary, the price of fuel per litre has been capped at HUF 480 (EUR 1.18) for over a year now. Limitations are becoming unavoidable as even the larger petrol stations struggle to keep up with demand. In some places, drivers might get only 10 litres of fuel for the capped price and some even choose to go to multiple pertol stations to fill up their tanks. Smaller petrol stations do not even receive supplies anymore in many cases.

The problem worsens

The Hungarian Mineral Oil Association warns that there are severe supply chain issues already. The government should decide if they want to cap prices or supply the market, said Ottó Grád, an energetics expert. He thinks that the price caps have caused too much damage so far, while price increases might not have caused as many problems.

Experts say that refinery capacity is already lacking. So, if the price caps remain, the demand will grow but supply will not be enough. If something were to happen with the oil pipeline coming from Russia, even crude oil could be missing. Also MOL, for example, had to limit the quantity of fuel meant for export. Their trucks are constantly on the road transporting fuel. According to the information given by them, fuel consumption has risen by 15-20 percent since the introduction of the price caps.

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The government’s response to ATV was that the price caps can only remain if some conditions are met. These include the undisturbed flow of crude oil from Russia and if the refinery at Szászhalombatta can continue to operate.

Petrol stations may run out of fuel

According to RTL, hundreds of petrol stations could run out of fuel within days. The supply chain problem is caused by the lowered capacity of the refinery at Szászhalombatta due to a longer than expected maintenance. Therefore, some customers have to go to different towns to get fuel.

Since the middle of November, small petrol stations might not even get supplies from MOL. Some stations had to limit the number of people a day who can get fuel for capped prices. Currently, at least 150 towns have problems with their supplies. Many stations even had to close as they ran out of fuel altogether.

Price caps caused imports to disappear as foreign suppliers have no incentive to sell their fuel at such a low price. At this point, every retailer wants to see the fuel price caps gone.

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Source: RTL.hu, ATV.hu