Motor fuel prices to be lowered in Hungary
The wholesale gross list price of petrol will be cut by HUF 5 per litre and that of diesel by HUF 4 per litre on Wednesday (8 May). Accordingly, we should find the following average prices at the pumps:
- 95-octane petrol: HUF 624 /litre
- Diesel: HUF 612 /litre
Economy Minister Márton Nagy warned fuel traders on 25 April they had two weeks to bring their prices closer to the regional average. By Wednesday, the price of petrol will have been reduced by HUF 23 and the price of diesel by HUF 21 since then.
The Hungarian Statistical Office (KSH) was tasked with compiling a regional comparison, a benchmark for the government to decide whether to intervene on the market or not in light of how domestic prices compare with the regional average.
The problem - first pointed out by Portfolio - was that the stats office included distant countries such as Czechia, Poland and Bulgaria in the regional average, greatly distorting it. Industry experts also complained that only the prices in neighbouring countries should be used when calculating the average, arguing that cross-border tank-filling trips were realistic only to these countries by motorists who live/work relatively close to the border and find domestic prices too high.
The KSH paid attention to said complaints and in its next release it calculated average petrol and diesel prices not only for CEE but also for just the neighbouring countries. Nagy said it was a "good idea" and that they "will consider" taking the new average into consideration. Prime Minister Viktor Orbán told public radio on Friday that the benchmark should be the average fuel price in neighbouring countries. So it's decided then.
Of course, it is not only fear of government intervention that has driven down domestic fuel prices, but also market developments.
In recent weeks, the refinery premium for diesel has fallen significantly, while gasoline has seen mostly sideways movement. The price of Brent crude, the benchmark oil product in the West, also dropped markedly.
The graphs below show the evolution of average fuel prices in Hungary, the wider region and Hungary's neighbouring countries since the start of 2023 up to 29 April. For your convenience we also have graphs showing only how much higher (very seldom lower) Hungary's fuel prices are compared to its neighbours or the select CEE countries. As noted above, the government will take into consideration the average prices for Hungary's neighbouring countries.
The following two graphs are fuel price rankings - petrol and diesel - for Hungary's immediate region, as this average is the one that will apparently be used as the benchmark before the government decides on any potential intervention.
Cover photo: Getty Images
