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MOL CEO: “As Long as Gasoline Price Cap Is in Place, There Will Be Tensions in Supply”

Hungary Today 2022.04.01.

“We are at home in this region, this is a responsibility, and shareholders must also take note of this,” said Zsolt Hernádi on the InfoRádió broadcast on Tuesday evening. MOL’s CEO also talked about why the gasoline price cap is causing temporary problems and why climate goals might take a back seat for a while.

This article was originally published on our sister-site, Ungarn Heute.

“Hungary’s supply of raw materials is continuously secured. MOL has two tasks in this area, one is to supply the market with petroleum products and the other is to operate the high-pressure natural gas pipeline network, both of which are our responsibility,” emphasized the CEO of the Hungarian oil company.

Of course, we see the war, we have a plan B, what happens when…”,

said Zsolt Hernádi, CEO of MOL, in the program Arena of InfoRadio, after Infostart.

A possible introduction of ruble bills would not pose a threat to the company for the time being as it only applies to gas, but in this area, it only affects transportation. But even if it is introduced for oil, it will not affect the company either, as most of the oil is purchased through Swiss traders, Zsolt Hernádi added.

Security of supply is not about whether it’s worth it for MOL: we have to secure supply,”

he noted, regarding the introduction by the government of an official price, first for retail and then for wholesale in the case of fuels. In the week of March 10, “a madhouse had developed” in Hungary, a panic reaction had broken out, but it has been controlled and quickly overcome.

At the same time, he added that despite all the legal restrictions, gasoline tourism in the country has increased, with total consumption in March usually 480 million liters, and now will be 560-570 million liters.

Panic Buying and Fuel Tourism: Government Reacts With New Measures
Panic Buying and Fuel Tourism: Government Reacts With New Measures

According to the government and Hungarian oil and gas company MOL, there is no fuel supply crisis in Hungary, but only an extreme increase in demand, which caused a logistical challenge.Continue reading

“The reason for the panic was widespread fear that oil supplies might be disrupted because of the price freeze or the war. Experts say that you really panic when you don’t understand what is happening but feel you have to act,” he said of the incident, pointing out that the temporary fuel shortage was also caused by the fact that the freezing of retail and wholesale prices, two-thirds of domestic imports were cut to 11-12 percent and MOL had to serve the remaining consumers, which took time.

As long as the price cap is in place, there will be supply tensions. This also applies to tank tourism,”

the CEO said, adding that it cannot be completely eliminated because operators have no authority to do so.

On the expected development of fuel prices, he said that there are three components: the fuel price, the tax component, and the forint-dollar exchange rate, adding that only the tax is under the control of the Hungarian state, which has also started to reduce.

We don’t know how long this price will last,”

Hernádi said finally.

According to the latest government decree, the price cap is in effect until May 15.

Hernádi also said that the company’s strategy will change partly because of the war and that they will have to create additional capacity, so some investments in the coming years may be ahead of the climate change requirement.

Source: InfoStart

Featured image via Zsolt Szigetváry/MTI

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