Fuel shortage in Hungary triggers panic buying

Published: 11:29 PM, 6 Dec, 2022
Fuel shortage in Hungary triggers panic buying
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A fuel shortage has led to "panic buying" at petrol stations, Hungarian energy giant MOL said on Tuesday, with blame directed at petrol price caps mandated by Prime Minister Viktor Orban's government.

"The supply situation is clearly critical, demand has skyrocketed, consumers are stocking up, and panic buying has begun," said MOL's executive director Gyorgy Bacsa in a statement sent to AFP.

Hungarian media published images of hundred-metre-long queues at filling stations nationwide on Tuesday, while an AFP photographer saw most pumps out of order at several stations in Budapest.

"A partial product shortage is present in our entire network and a quarter of our filling stations were completely empty," said Bacsa.

The fuel shortage has been caused by a 30 percent drop in imported fuel, as well as maintenance at one of MOL's refineries, and will take "several weeks" to resolve, he said.

But a government-mandated price cap on vehicle fuel products which has led foreign firms to cut fuel shipments to Hungary is behind the import shortfall, according to the Association of Independent Petrol Stations (FBSZ).

"The price cap must be dropped," said FBSZ in a statement sent to AFP.

In November 2021 Budapest decreed a fixed price of around 1.17 euros per litre of 95-grade fuel. Reviewed every three months, the cap was last extended in September and is valid until the end of the year.

The government said price caps -- on a range of basic foodstuffs as well as fuel -- were aimed at supporting the economy and curbing rampant inflation which it blames on the effects of EU sanctions against Russia.

Annual inflation in Hungary reached 21.6 percent in October, its highest level since 1996, and the third highest in the EU, according to Eurostat.

But Hungary's central bank governor Gyorgy Matolcsy blamed fuel and food price caps for adding "three to four percentage points onto inflation".

"They should be immediately withdrawn," Matolcsy, usually seen as an Orban ally, told a parliamentary committee on Monday.

Adding to Orban's economic woes, recession is looming with GDP contracting by 0.4 percent in the third quarter, while the local currency, the forint, has plunged to record lows against the euro this year.

Last week the EU's executive also recommended that bloc funds totalling more than 14 billion euros ($14.6 billion) be withheld over corruption and rule-of-law concerns.

"Hungary is in a near-crisis situation," said Matolcsy.

Categories : Business

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