Economy 19 February 2024, 11:44am

High uncertainty in the oil market - What to expect at Hungarian pumps on Wednesday?

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After last week's marked price hikes, Hungarian energy group Mol is to raise only the wholesale gross list price of petrol on Wednesday (21 February). The steep rise seen in recent weeks is mainly due to the surge in oil prices as the situation in the Middle East escalated, but the strengthening dollar also had an impact on the price of domestic oil products. Commenting on the recent price hikes, Economy Minister Márton Nagy said earlier that Hungarian petrol is too expensive, but that he sees scope for price adjustments.

Rossz hírt kaptak az autósok, féléves csúcson az olaj ára

The wholesale gross list price of petrol will be raised by HUF 4 per litre on 21 February, fuel price tracking site holtankoljak.hu reported on Monday. The price of diesel will remain on hold this time. Accordingly, we should find the following retail prices (on average) at the pumps as of Wednesday:

95-octane petrol: HUF 618/litre
Diesel: HUF 661/litre

The price of petrol went up HUF 14 per litre and that of diesel by HUF 21 per litre last week alone.

By Wednesday, fuel prices will have gone up a lot since the end of 2023, though: HUF 48 (+8.4%) in the case of petrol and HUF 68 (+11.5%) in the case of diesel. You may get some consolation looking at end-2022 prices, but if you look further down the road, the smile will quickly turn into a frown.

This is how fuel prices changed in Hungary since the start of 2023. The price of both fuel types was last this high in early or mid-October.

Oil prices have risen sharply in recent weeks after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal by Hamas. In addition, the US launched a series of retaliatory strikes against Iran-linked militant groups in the Middle East in early February, with the spectacular souring of relations also driving up oil prices.

OPEC's communication on oil supply cuts also pushed Brent higher, but the price was also affected by the IEA's monthly report, in which the energy agency warned of a fall in global oil demand, citing a significant drop in Chinese demand.

Also contributing to the recent surge in domestic fuel prices is the weakening of the forint against key currencies, including the USD, in recent weeks. Following the release of US inflation data last week, the dollar suddenly started to strengthen spectacularly, while the forint eased in parallel. This was followed by the much weaker-than-expected Hungarian fourth-quarter GDP data, which also delivered a blow to the HUF.