Economy 24 April 2024, 10:15am

Fuel prices to be lowered in Hungary, gov't intervention still possible

Portfolio

Hungarian energy group Mol is to cut the wholesale gross list price of both petrol and diesel on Friday (26 April), fuel price tracking site holtanlkoljak.hu reported on Wednesday.

The price of 95-octane petrol will be trimmed by HUF 3 per litre and the price of diesel will be HUF 6 per litre lower as of Friday. How these changes to the wholesale gross list prices will be reflected in retail prices at the pumps is highly uncertain, the portal said. Current practice dictates that we should find similar changes in the average prices too.

There are signs the government is preparing to intervene, but if it refrains from it, we should find the following average prices at petrol stations come Friday:

95-octane petrol: HUF 647 /litre
Diesel: HUF 633 /litre

The price of petrol will be 13.5% or HUF 77 higher than at the end of 2023, while the price of diesel will be 6.7% or HUF 40 per litre higher.

For the first time since 2 August 2023, the price of diesel dropped under the price of petrol last Friday (19 April) and on Wednesday a litre of petrol will be HUF 14 more expensive than a litre of diesel, the widest (negative) gap since 28 July last year.

Economy Minister Márton Nagy admitted to news portal Index on Tuesday that on Wednesday he would propose to the government to intervene in fuel prices. He stressed that if profit margins fall, it is still possible to sell fuel profitably, so he is not afraid of supply problems cropping up, as happened last time.

Nagy minister already spoke about the planned fuel price regulation at a press conference on Friday. At the time, he said that the reintroduction of a fuel price freeze was not ruled out.

Speaking with Index, Nagy did not go into details of what the intervention would mean, saying only that there is room for reduction, as the price of petrol is 3% higher than the regional average, while the price of diesel is 5% higher. He said that the price of diesel will be cut by HUF 8 this week, which he said was due to this government communication.

"This is a good example of how retailers feel they are overcharging, even though the government has only communicated this," he said.