January 31, 2023

MARTONVASAR, Hungary (AP) — Drivers in Hungary are increasingly encountering fuel and diesel shortages at service stations as a government-imposed price cap puts pressure on operators of independent service stations and the state-owned energy company struggles to keep up with demand.

At hundreds of gas stations across Hungary, a bewildering mosaic of paper signs hangs from the pumps to tell customers what’s available – or not – and at what price and in what quantity.

A sign at a station in Martonvasar, a town 20 miles southwest of Budapest, Hungary’s capital, informs motorists that they can only buy two liters (one 1/2 gallon) of fuel at a reduced price, which was introduced more than a year ago by the government was set. The volume limit, the station owner said, is a result of the fact that state-owned energy company MOL has not made fuel deliveries to its company and many other companies for the past three weeks.

“They have reduced supply to exactly zero, so fuel with a regulated price for these stations has completely disappeared from the market,” said Laszlo Gepesz, owner of the small station and co-chair of the Hungarian Association of Independent Gas Stations.

The fuel price cap imposed by Hungary’s populist government in November 2021 capped the price of petrol and diesel at 480 forints ($1.22) per liter.

As market prices continued to rise, particularly after Russia invaded Ukraine in February, Hungary’s fuel imports plummeted; foreign suppliers found the country a less attractive place to sell given the mandatory discount prices.

That left only the state-owned power company to produce diesel and gas at a reduced price, but it has struggled to supply the cheaper fuel to the whole country.

MOL says its refinery in the central Hungarian city of Szazhalombatta is only operating at around 50% capacity due to technical difficulties. Disruptions in Hungary’s oil supply from the Druzhba or Friendship pipeline, which delivers crude oil from Russia to Hungary via Ukraine, have also contributed to delays in deliveries.

MOL did not respond to a request for comment.

Consumption has skyrocketed in the more than a year that the price cap has been in place, said Gepesz, the owner of the Martonvasar gas station, exacerbating supply problems that have affected up to 500 gas stations across Hungary.

“Things that are cheap run out more easily, so people are buying gas like there’s no tomorrow,” he said. “The country’s total consumption (of fuel) is 20-25% higher than last year, an amount that not even MOL can deliver.”

Speaking at a press conference on Wednesday, Prime Minister Viktor Orban’s chief of staff Gergely Gulyas said the price cap – due to expire on December 31 after several extensions – could only remain in place for as long as MOL is able to keep up with demand.

“If this is not possible and (fuel) has to be imported, then of course the import price is much more expensive. So the question is how long we can supply the country with gasoline and diesel,” Gulyas said.

Hungary is heavily dependent on Russian oil and gas. His government has vigorously campaigned against European Union sanctions against Moscow – particularly those that would affect imports of fossil fuel products – blaming them for rising energy prices and rising inflation.

Marika Vastag, 73, a farmer in the village of Pusztaszabolcs, filled a 10-liter jerrycan with gasoline on Wednesday and paid the market price, as discounted fuel had not been delivered to the service station for more than two weeks.

She reiterated Orban’s claims that EU sanctions on Russia were primarily responsible for the rise in energy prices and accused the bloc of pressuring Hungary to wean itself off Russian fossil fuels.

“Things would be better if the (European) Union would stop making our lives miserable and stop demanding that we phase out Russian energy because unfortunately we depend on them for fuel and oil,” he said Vastag. “Unfortunately we are not independent, we don’t have everything (what we need). So we have to stick with those who help.”

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