Politics

Hungary excludes cars registered abroad from state-controlled fuel prices

Hungary has decided that its state-controlled fuel prices will only be available to Hungarians. Cars registered abroad will pay the full price.

car fuel filling station

Hungary decided to exclude cars registered abroad from buying fuel at the capped price. From May 27, only vehicles with a Hungarian license plate or registered in Hungary will get access to diesel and gas set at 480 forints ($1.31) a liter.

Market prices will apply for other cars, approximately 700 forints a liter ($1.91) at the moment. Official market prices will be the ones displayed at filling stations. But customers with domestic vehicles will pay  480 forints (€1.22) per liter for diesel fuel and 95-octane gasoline.

The decision from the new Orbán government was announced on Thursday and was implemented immediately. Antal Rogán, head of the Prime Minister's Cabinet, justified the move to avoid any more neighbors trying to take advantage of the cheap prices before the new rule is enforced.

The government wants to stop "fuel tourism" from other European Union members like Austria and Slovakia where fuel is closer to 2 euros per liter.

The decision may be a cause of concern on equal treatment between E.U. citizens and comes at a time when Hungary disagrees with an E.U. oil embargo on Russia.

Hungary has set a price ceiling for fuel since November and will continue to do so until at least July 1. Prices will be reviewed in mid-June, according to the government.

Slovenia, another E.U.-member neighbor of Hungary, controlled fuel prices at stations from mid-March until the beginning of May. But it reintroduced a price freeze two weeks later until August 10, limiting 95-octane gas to 1.560 euros, and diesel to 1.668 euros per liter.

This is one of the first decisions of Viktor Orbán's fifth government, officially formed on Tuesday, under the state of emergency declared this week in order to "prevent the armed conflict and humanitarian catastrophe in the territory of Ukraine and to prevent their consequences in Hungary". The government can implement emergency measures by decree.

It also plans to publish a tax on excess profit for large companies like banks, insurance, energy and pharmaceutical companies, retail chains and airlines for the next two years. It is expected to generate 800 billion forints ($2 billion) a year. Authorities will also increase excise duties on tobacco and alcohol and other tax that seek to bring in 100 billion forints. It will reintroduce a tax based on advertising revenue that was implemented from 2014 to 2019.

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