Price cap: important change missed, diesel could run out by mid-August
The latest change to the fuel cap rules was announced on Saturday. Unfortunately, this still does not promise a solution to the expected supply problems: the government has not increased the wholesale price, which would be necessary to stimulate imports. As a result, diesel could run out in mid-August.
New rules, but an important thing still was not changed
You can read about the latest rules regarding fuel purchase in Hungary here. With the fuel price changes announced on 30 July, the government and Mol aimed both to exclude company cars from the subsidy scheme and to stimulate imports, Telex.hu reports.
Telex also tried to investigate the expected consequences. Talking to experts, they finally came to the conclusion that a very important piece of legislation, Government Decree 57/2022 of February, will remain in force. This is the one that regulates the wholesale price of fuel, i.e., the price at which petrol stations receive fuel from wholesalers (or more precisely, only from Mol now).
According to the Decree, the maximum wholesale selling price of motor gasoline of quality grade ESZ-95, as defined in the standard MSZ-EN 228, and diesel fuel of CN code 2710 20 11, as defined in the standard MSZ-EN 590, applicable to suppliers, remains HUF 480 (EUR 1.20) per litre.
Pointless measure
Investment expert Viktor Zsiday says the measure is pointless and largely ineffective in terms of important macroeconomic objectives, szeretlekmagyarorszag.hu reports. The real impact of the measure, he says, is that it only raises the costs of businesses, which they pass on, thus generating inflation, while increasing Mol’s profits, which the government takes away by raising the special tax.
So even though there are more people at the pumps since noon on Saturday who buy petrol and diesel at market prices, the situation of the wholesalers who would import the fuel, among others, has not improved.
Diesel shortage could be expected
Under the current rules, anyone can import products and sell them at their own petrol stations, partly at market prices and partly at official prices. In other words, if OMV or Shell decide that in the new situation it is already worthwhile to import petrol and diesel from their own wells, this may create some import pressure on their own networks. However, it is unlikely that they would supply to other domestic wells.
However, even this does not necessarily mean that the supply of their own network will improve: if there is a shortage of diesel in Europe, these companies will probably not sell the fuel in Hungary at the lower, official price, but will deliver it to where they can charge a higher price.
Read also1.19 EUR/l fuel price will end soon in Hungary!
Source: Telex.hu, szeretlekmagyarorszag.hu
Human Honest Oversight – by this present Fidesz led Government, under it’s Leader and current Prime Minister of Hungary – Victor Orban.
Convenient – take the “ROARING” heat in the Kitchen, that grows, for the Hungarian Government, under Victor Orban – and OVERSIGHT – this Diesel reported shortage – CALAMITY – that is and will continue, to exist in – Hungary.