At an extraordinary government press conference on Wednesday night, Chancellery Minister Gergely Gulyás and MOL CEO Zsolt Hernádi announced the immediate end of the fuel price freeze.
Market prices now apply at petrol stations without exception; Hernádi quoted 641 forints for a liter of regular petrol and 699 forints for normal diesel. Now the hope is that the chaotic conditions at the gas stations will end, that the market will normalize and that importers will return. Prime Minister Viktor Orbán signed the urgent decree, which came into force from 11 p.m., on Tuesday evening following his return from Albania.
Although Hungary had successfully fought once morest the ban on Russian oil deliveries and sanctions that came into force on Monday, supply problems had arisen, Gulyás emphasized at the hastily scheduled government press conference. The sanctions imposed so far will be very damaging to Europe and will destabilize the competitive situation. He therefore expects a sober assessment of the question of whether the EU energy sanctions have brought so much benefit that they should be maintained.
A quarter of the gas stations were completely empty
Hernádi informed the Energy Minister on Monday that without imports the country’s fuel supply would no longer be guaranteed. A quarter of the gas stations had completely run out of fuel in the past few days. At the other gas stations there were chaotic conditions due to the long queues.
“It’s not good if something is expensive.
However, it is much worse
when something no longer exists.”
Mol has sold 2.2 billion liters of fuel so far this year, compared to a total of only 1.5 billion liters last year. In the last 7 days there were more than 50 million liters – an increase of 60% year-on-year.
Find alternative solutions
“We also need to be prepared on how to find alternative solutions in the event of a disruption to the Druzhba oil pipeline. For this reason, imports must be restored and stocks replenished,” emphasized Hernádi. Measures must be taken today so that Hungary has a stable, import-supported fuel market and significantly higher inventories once more at the beginning of next year.
Under all circumstances, it must be avoided that the country’s security of supply is shaken. If the Druzhba pipeline is not operational, the oil must be replaced by the Adriatic pipeline. But the Croatians also have to be partners for this, Hernádi continued.
Inflation is fueled
According to Gulyás, the implementation of the price cap will further fuel inflation. But a price freeze only makes sense if it does not lead to a shortage. He emphasized that the government had maintained the price cap for as long as possible, namely 13 months. But even with current fuel prices, Hungary is still in the bottom third of Europe.
Market needs weeks to normalize
It will take 1-1.5 months for the situation to return to normal, said Hernádi. The supply to the small gas stations is being continuously increased. However, the majority of them obtained their fuel from imports and these contacts should now be revived.
MOL expects that raw material and especially oil prices will move at a much higher price range next year. This is a consequence of the EU sanctions and the suspended commissioning of Nord Stream 2 by Germany.
During the course of the day it had already become clear that the dramatic escalation of the situation would require a quick decision.
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