To prevent further increases, the Hungarian government announced it will freeze petrol and diesel prices at the HUF 480 level for three months effective November 15.
“As the price of petrol and diesel affects the operation of the economy and prices in general, the government has decided to fix the price per liter of these products at HUF 480 (€1.31) for three months starting Monday, November 15,” cabinet minister Gergely Gulyás, said at the weekly government briefing on Thursday.
He added that this means that the price list for diesel and 95 octane petrol may be lower than HUF 480 but not higher. If filling stations do not comply with the regulation, they will face mandatory closure. After three months, the government will review the situation and decide whether to withdraw or extend the measure.
Gulyás said that the price reduction only affects the retail margin, and suppliers will not be compensated. The government cannot reduce the fuel excise tax per the regulations of the European Union.
According to the minister, the government is confident that the move will help the economy and contribute to reducing inflation.
This is based on the fact that the price of fuels affects not only the population in the retail segment, but also costs for companies, and thus for entire sectors. The impact of high fuel prices is usually passed on to the final consumer price of goods and services, i.e., the population ultimately pays for the price increase and inflation worsens.
On October 25, the average petrol price exceeded the psychological limit of HUF 500, while diesel exceeded that level on October 11. The main reason for this is that the world market price of oil has reached a seven-year high, with the price of Brent per barrel in our region rising by 70 percent since the beginning of the year, from $50 to $85.
The minister said the decision was preceded by a study of EU fuel prices. In the past 12 months, average fuel prices in Hungary rose by 38.3 percent and by 31 percent since the beginning of the year.
So far, Hungary is the second European Union member state to freeze fuel prices, after Croatia did the same on October 21, setting its price at the equivalent of HUF 550 for one month.
