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Ottó Grád, secretary general of the Hungarian Petroleum Association, sees that domestic petrol and diesel prices will remain below the regional average. However, the future of fuel prices is uncertain due to global and regional developments, Világgazdaság reports.
In Hungary, fuel prices fell significantly by 20 forints (0.049 euros) until mid-March, compared to the beginning of the month, before starting to rise again. However, prices at the end of last month were still lower than the starting level.
Oil prices fluctuated between 69 and 75 dollars per barrel in March. This was influenced by several factors, such as the expected negative impact of tariff measures weakening economic growth and oil demand, and the planned OPEC+ production increase from April 1, putting downward pressure on prices.
In addition, weakening global oil demand and rising non-OPEC production have also played a role, and the outcome of the Russia-U.S. and Ukraine-U.S. negotiations could also have an impact on the oil market in the event of a longer-term ceasefire.
OPEC+ countries will increase production by 138,000 barrels per month from April 1, while members that have been overproducing in the past are expected to make compensatory cuts. This is supposed to reduce OPEC+ output, but past experience, such as Iraq’s systematic quota overruns, suggests that these commitments are often not met.
On the other hand, tougher U.S. measures against Iran and Venezuela, the prospect of an extra 25-50% tariff on Russian oil, and the possible bombing of Iran supported oil prices at the end of the month. Another factor pushing up prices was the U.S. airstrikes against Yemeni Houthi rebels in the strategic Red Sea region.
Increasing tensions in the Middle East are fueling uncertainty in the oil market, which is also pushing prices higher.
The forint exchange rate against the U.S. dollar fluctuated between 385 and 363 against the U.S. dollar, strengthening to 363 by mid-month and weakening to 371 by the end of the month, but still contributing to the fall in fuel prices. The Hungarian Central Bank left its base rate unchanged, but lowered its forecast for economic growth this year and raised its inflation expectations.
Petrol prices were lifted at the end of the month by the start of the switch to summer quality, lower stocks in Rotterdam and the U.S., and higher demand in West Africa and the U.S. For diesel, the fall in the U.S. and Rotterdam stocks and the expected fall in European imports due to renewed tensions in the Middle East also caused prices to rise.
Commenting on price developments in the coming period, Ottó Grád, secretary general of the Hungarian Petroleum Association, told Világgazdaság that although fuel prices in Hungary will remain below the regional average – gasoline and diesel prices were also more favorable in March compared to neighboring countries – global and regional developments point to an uncertain future. He added that
Trump’s actions and OPEC+ decisions could destabilize the market at any time.
The tariff hikes announced on April 2, could worsen global economic performance, reducing demand for oil. Events in the Middle East could continue to push up prices, especially if Iran responds to political pressure by closing the Strait of Hormuz. The U.S. proposal to impose port charges on ships built in China, which could constrain oil and fuel transport capacity and increase transport costs, is not helping to moderate prices either.
Via Világgazdaság, Featured photo via Pixabay
