Capped Fuel Prices: Gov’t to Help Small Petrol Stations Battle Losses

The government, “knowing and understanding the situation of small petrol retailers,” has taken six measures to help them, László György, State Secretary of the Ministry of Innovation and Technology (ITM), said on his Facebook page.

As we have reported before, the price of fuel is capped in Hungary, meaning that gas stations must sell fuel at a maximum price of 480 forints (EUR 1.34 per liter). According to a government mandate, this decision was extended until May 15, 2022, three months longer than originally announced.

Not everyone welcomed the measure, as smaller stations started to struggle financially. Some were closed, some introduced volume restrictions. Recently, even Shell introduced such a restriction because truck drivers fill up their vehicles in Hungary.

Recently, Ottó Grád, Secretary-General of the Hungarian Petroleum Association (MÁSZ) said that “After Friday’s renewed fuel price increases, there will be no more gas stations in Hungary whose purchase prices are lower than the sale price, or who do not lose a single forint due to the price cap.”

“The epidemic and the dramatic increase in world energy prices have led to an increase in fuel and food prices throughout Europe, that’s why the government decided to continue to protect the Hungarian consumer and cap prices until May 15,” the Ministry of Innovation said earlier.

Now, however, László György listed the following ways to help smaller petrol stations:

1. Credit moratorium for the affected small petrol stations.
2. Waiving of the MSZKSZ fee (stockpiling fee) and transfer of the discount to the petrol stations.
3. Exemption from social contribution tax for petrol stations up to four employees per service station between January 1 and May 31.
4. Support for investments in petrol stations with less than 10 employees from the Hungarian Village Entrepreneurship Restart Program, with a 70% subsidy in the event of a successful application. This means that the government will cover HUF 10 million (more than EUR 27,500) of the cost of a HUF 14 million (almost EUR 39,000) fuel dispenser with four service pistols. This will reduce the cost of petrol stations and make service easier and available 24 hours a day, thus improving the security of supply in rural areas. The aid could amount to up to HUF 5 billion (almost EUR 14,000,000) for the whole sector.
5. 0% bridging loan under the Széchenyi Card Program.
6. Abolition of the tax on energy purchased from abroad (Government Decree 816/2021 (28.XII.))

According to Portfolio, the second and third steps will directly reduce losses for the wells, while the others will help with borrowing and investment.

Featured image: illustration via Pixabay