Hungarian fuel prices at six-year low

Falling crude prices and a favorable dollar exchange rate led to a one-third reduction in Hungarian fuel prices since last October, daily Magyar Idők reports.

Hungarian oil and gas group MOL - the company setting wholesale fuel prices in the country - announces its prices weekly, and the latest petrol price now stands at HUF 341 (US$1.21) and diesel at HUF 375 (US$1.33) per liter.

At its peak in April 2012, petrol in Hungary was priced at HUF 451 per liter while diesel hit an all-time high of HUF 449 in January of the same year.

Fuel retail prices in Hungary change mainly as a function of crude prices, which have dropped to US$56.98 per barrel by the end of last week from last year's peak of US$83.50 in September. The second most important factor is the forint/dollar exchange rate, which has remained mostly steady in the past few months due to good economic indicators in Hungary.

The diesel/petrol price differential is mainly determined by market demand and prices in neighboring countries. As in most other European countries, the effect of crude prices and exchange rates is not in linear relation with fuel retail prices, as the latter have an over 60 percent tax component: VAT, environmental and road tax are all included in the final price.

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