Hungary's petrol price cap: will it work?
Even before the elections in April, the Hungarian government capped the price of petrol in the country. Since last week, however, discounts only apply for vehicles with Hungarian licence plates. A higher price applies for cars from abroad. Commentators see potential for conflict at different levels.
Support those who need it
Népszava sees the price cap as unfair:
“The owner of a small car with a one-litre engine receives a smaller subsidy, while the millionaire entrepreneur receives a much higher sum for his SUV, even though he doesn't need it at all. Those who can afford a car with high fuel consumption should finance it themselves. And we must not forget, there are many for whom driving a car is essential for their livelihood. Without a car they have no job. For these people, the government should have come up with some kind of subsidy for the past three months.”
Not economically viable
Petrol companies in Hungary will face major problems, points out Cătălin Striblea on his blog:
“Except for state-run Mol, other big players - specifically OMV Group and Shell - have refused to import fuel or distribute it on the market, which would have caused them losses. Mol therefore had to cover the entire system with its distribution logistics, which, however, was only 66 percent successful. The result was that there were no more petrol stations in some areas for certain periods of time. ... Officially, Mol says it can still keep up because as a large company it gets some of the money back from other markets. But even here it will find it difficult to maintain its staff.”
Euronews's Hungarian service sees a serious legal dispute between Budapest and Brussels as unlikely:
“In an interview with radio station Inforadio, the head of the Prime Minister's Office Gergely Gulyás acknowledged that the most vulnerable element of the budget adjustment package is the dual petrol pricing. However, he maintained that the Hungarian government had 'good arguments' for doing this. If it does insist on dual pricing, it would take several years for EU institutions to abolish it. This is unlikely, not least because in any event it's only a temporary measure.”