Painful tax increases coming in Hungary: petrol, cigarettes and more to cost extra
From this January, Hungarians will face notable tax increases: excise duties on petrol, tobacco products and alcohol are set to rise—more steeply than previously expected. The cause is not global oil prices or a new round of government austerity, but rather an unseasonably cold May combined with a peculiar method of calculation.
The story began last autumn, when the government decided to implement inflation-linked tax increases. Under the new rule, a number of levies—including excise duties, company car taxes, vehicle taxes and certain fees—will automatically increase each 1 January in line with the inflation rate measured in the previous year. The intention was to remove the need for annual legislation.
The twist lies in how the rate of tax increases is determined: it is not based on annual or year-end average inflation, but solely on data from the preceding July, according to HVG. This method carries a clear risk—if inflation spikes in July for any reason, it automatically triggers higher tax increases.
July inflation surge leads to steeper taxes
That is precisely what happened this year. According to fresh figures from the Central Statistical Office (KSH), inflation in July 2025 stood at 4.3%—higher than anticipated. The main factor, according to official statistics, was a reported “23% price rise” in piped natural gas, despite the fact that gas prices themselves had not actually changed. This anomaly resulted from adjustments to the utility price regulation system and the statistical methodology applied.
Alongside regulated pricing, there is also a consumption threshold: households exceeding it must pay seven times the base rate. Each month, the KSH estimates how much gas is consumed at the subsidised rate versus at the market rate. However, because actual consumption data for July was unavailable, the office relied on a 12-month moving average, with May as the most recent data point.
May 2025 was unusually cold: morning temperatures ranged between 35°F and 48°F (1.5°C to 9°C), and daytime highs often remained below 63°F (17°C). Many households switched their heating back on, almost doubling gas consumption compared with May 2024. Consequently, the statistics suggested that more households had exceeded the subsidised threshold, pushing the calculated gas price higher—and, by extension, raising measured inflation.
Tax increases: what to expect
The elevated July inflation figure now translates into sharper tax increases in January. Here are some of the specific increases:
- Petrol (95 octane): from HUF 201.68 (€0.52) to HUF 210.35 (€0.55) per litre
- Diesel: from HUF 188.93 (€0.49) to HUF 197.05 (€0.51) per litre
- Pack of 20 cigarettes: from HUF 904 (€2.35) to HUF 942 (€2.45)
- Beer: from HUF 18.7 (€0.05) to HUF 19.5 (€0.05) per litre
- Industrial-scale pálinka: from HUF 5890.4 (€15.31) to HUF 6143.7 (€15.97) per litre
In short, an unexpectedly cold May is set to make January financially blistering for Hungarian consumers.
Read here for more news about tax/VAT in Hungary
Read also:
- Euro Hungarian forint exchange rate: Latest update and accurate forecasts for August 2025
- Inflation, the forint, and your wallet: Hungary’s latest central bank move
To read or share this article in Hungarian, click here: Helló Magyar