Without the 480 forint price cap, diesel would currently cost 640 forints at the pumps, while 95-grade petrol would cost 594 forints, according to estimations.Continue reading
As we have previously reported, wholesalers are now more affected by the price cap due to the government having cut petrol stations’ losses but did not prevent big losses for wholesalers.
Wholesalers are losing 100 forints per liter of fuel sold, because that is roughly the difference between the wholesale price and the official price, said Eszter Bujdos, Managing Director of Holtankoljak.hu.
MOL is the only company that supplies the wells, but their logistical capacity is a bottleneck, so we are seeing more and more petrol stations that may have temporary stock shortages, even of basic products, Bujdos said.
Last week’s deliveries were still going to the approximately one hundred private petrol stations, but Bujdos says there could be stock shortages at more and more wells this week, and service could be problematic at some locations over the long weekend.
The President of the Independent Petrol Stations Association (FBSZ), Gábor Egri, confirmed what Eszter Bujdos said about supply problems, and they are also experiencing that some of the smaller fuel wholesalers are limiting or stopping deliveries to petrol stations. He also agreed that there could be supply problems over the long weekend and said that 70 percent of the market has so far been served by MOL as a wholesaler, with the remaining 30 percent served by other fuel wholesalers.
In his opinion, if MOL is hit by this 30 percent, it will cause logistical difficulties and they will not be able to serve the market as they have done so far. Trucks are also queuing up at petrol stations for cheap fuel, and foreign haulers are also filling up in Hungary. But the stations are not equipped to handle this traffic, Egri added. He thinks, however, that the good news is that truck traffic will decrease over the long weekend, which will take a burden off of gas stations. Nevertheless, fuel delivery can still be expected to be disrupted.
Egri also talked about what he thinks should be changed regarding the fuel price cap. According to him, the price freeze is necessary because the population should not be burdened with the additional cost of more than 100 forints per liter, but the current situation can continue for a month or two at the most. He believes that the price freeze should be introduced gradually as soon as possible, combined with a greater role for the state, for example, by temporarily reducing or phasing out excise duty and VAT. He also said that the use of the bio-component in fuels should also be temporarily abandoned because the loss of grain supplies from Ukraine and Russia due to the war will cause shortages. For the crops available, preference should now be given to food use rather than burning what is available as fuel, he noted. If the bio-component is not expected for some time, it would be a significant relief on the supply side, he said.
Egri also said that the situation changes from hour to hour. For example, if the US-Europe-Iran nuclear deal is reached in a week or two, oil prices could recover.
Featured image: illustration via Pixabay