Gasoline would cost 520 to 540 forints per litre in Hungary

Ottó Grád told ATV that such a loss cannot be managed in the long term.

If we adjusted to the world market price of oil, the price of petrol would be around 520-540 forints without the regulated price,

he pointed out. The real market price would therefore already be 15-20% higher than the capped price, which would be borne by traders, while consumers pay that much less for filling up their cars.

He also recalled that the Croatian government had reintroduced the official price freeze on fuel, but they had adjusted it to the real price, i.e. to around HUF 530-535 equivalent to Croatian kunas per litre.

Grád also said that a small, rural businesses operate in much less favourable conditions, with much less reserves. Therefore, it is not surprising to see petrol station closures there. Daily newspaper Népszava wrote on Tuesday that the first pumps to close down due to the government's fuel price freeze were a petrol station near Szeged, one in northern Hungary and one east of the River Tisza.

The newspaper understands that the pumps in question supplied the residents of small villages where there are no other filling stations in the vicinity. It also noted that, surprisingly in the light of previous developments, the Ministry of Innovation and Technology (ITM) has not appointed Mol, which has previously been the only company to undertake such takeovers, to take over the units going under.

Earlier, the government said that it would ensure the takeover of petrol stations that might fail due to the HUF 480 fuel price cap that came into force on 15 November. (Mol was the only company to sign up for this role by the 18 November deadline).

The ministry is not obliged to designate anyone to take over the operation of the pumps, it is only an option, but there has been no reaction from the ministry to the filling station operators' official request. "So far, Mol has not taken over any filling station, and we have not received any request from the ITM to do so," the oil company told the newspaper.

Fuel sales account for 80 to 85% of a service station's revenue, while ancillary activities - such as car washing - make up a fraction of that, and cannot compensate for the lost revenue, ATV said.

Expressing the interests of the market players, Ottó Grád stressed that the best thing would be to abolish the price cap, but as more and more opinions are heard, for example about an extension, he believes that this could not be done at the HUF 480 price. 

If the price freeze is maintained at 480 forints, then a mass closure of wells can be expected,

he predicted.

He sincerely hoped that there would be further discussions on the legislation and that its extension would be preceded by consultations with industry players. 

Cover photo: MTVA/on commission by Sándor Branstetter