Significantly higher fuel prices expected from next January

Experts said that Hungarians paid the price of the government’s fuel price caps introduced before the 2022 general elections, bringing Orbán a fourth consecutive landslide victory. Analysts believe the prices will continue to rise, and 2024 may start with record-high prices concerning gasoline and diesel.

Tamás Pletser, Erste’s oil and gas analyst, highlighted that product prices increased drastically compared to crude costs. The two main reasons are the weak forint and the rising crude oil prices. Furthermore, the market changed in Hungary due to the fuel price caps the Orbán administration introduced in November 2021 and abolished only in December 2022. Based on their experience, competition is lower in the retail and wholesale sectors. As a result, prices are higher.

Eszter Bujdos, the CEO of holtankoljak.hu, said the prices were affected by the Hungarian forint-American dollar exchange rate. If the price of Brent-type oil changed, its effect would be plausible in the Hungarian market just days later.

One of their colleagues said that in the biggest city of Sicily, Catania, diesel costs 1.72 EUR/l, while gasoline type 95 is 1.89 EUR/l. In Spain, those costs are 1.85 EUR (gasoline) and 1.72 EUR (diesel). Compared to neighbouring countries, the price differences are no longer significant except in Romania. One litre of gasoline costs only RON 7.5 (1.52) in Hungary’s Eastern neighbour. Therefore, a lot of Hungarians travel there to do the shopping or buy fuel.

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Tax will increase drastically from January

Among the reasons experts mentioned the high Hungarian taxes compared to the Romanian, Austrian, or Croatian ones. Furthermore, in Hungary, service providers must pay a 4.5 pc excess profits tax, which is, in practice, a VAT increase. Thus, it is covered by the consumers, the car drivers.

According to the analysts, we should not expect a significant price rise until the end of this year. However, from 1 January, fuel prices will exceed HUF 700 (EUR 1.83). That is because the excise tax on fuel products will increase by HUF 41. Tamás Pletser believes that service providers will include that sum in the consumer price.