Hungary to cap gasoline and diesel prices amid surging costs

November 11, 2021 GMT

BUDAPEST, Hungary (AP) — Hungarians will soon have some relief at the pumps after the government announced Thursday that it will limit the price of gasoline and diesel amid soaring fuel prices.

Government minister Gergely Gulyas told reporters that a cap of 480 Hungarian forints ($1.50) per liter of fuel would go into effect nationwide Monday, a reduction from the national average of 506 forints ($1.59) for gasoline and 512 forints ($1.61) for diesel.

The cap will be in place for three months and then will be reviewed, Gulyas said. Fueling stations that charge more than the established cap could be shut down, he said.

The decision came as fuel prices have climbed to near record levels in Europe and the United States, pushed by inflation, ballooning crude oil prices and increasing demand as economies heat up after mass disruptions caused by the COVID-19 pandemic.

Average prices for gasoline and diesel are more than 50% higher per liter in Hungary than this time last year.

The decision to cap fuel prices came amid other financial woes in Hungary that could play a role when voters go to the ballot box in national elections scheduled for April.

The Hungarian forint weakened to within 1% of a historic low against the euro Thursday, and inflation reached 6.5% on the year in October, according the Central Statistical Office.

Share prices of the Hungarian oil and gas company MOL dropped more than 6% with the price cap announcement, later stabilizing to a loss of around 4%.