Capping fuel prices: proposals sent to the government to save service stations

On Monday morning, service station and government officials met for talks. Retailers have tried to shine a light on the increasingly dire situation that has dragged on for weeks due to the fuel price freeze. The Association of Businesses and Employers (VOSZ) has offered to reduce the negative impact through compensation, an interest-free loan or refunds of taxes and contributions. The government continues to insist on freezing the price of gasoline to protect Hungarian families, but is ready for consultations with representatives of small gas stations, responding to the proposals of the State Secretary for Economic Strategy. The government expects constructive and detailed plans by the second half of the week.

This article was originally published on our sister site, Ungarn Heute. Translated by Julia Tar.

On Monday morning, service station representatives began discussing with the Ministry of Innovation and Technology (ITM) possible solutions that would mitigate their losses from the fuel price freeze, the secretary general of the ITM said. National Association of Entrepreneurs and Employers (VOSZ), László Perlusz.

“The essence of these proposals is that not only gasoline retailers, but also retailers would bear the burden of maximizing current prices.

We do not deny that the measure is necessary, we accept that it is a necessary and forced step in the fight against inflation, we also accept the social necessity, but we try to emphasize in the negotiations that in this situation, small businesses go bankrupt,”

Perlusz stressed after the talks.

The proposals are:

  • the structure of the collection of VAT and excise duties should be reviewed immediately
  • the Hungarian companies concerned should receive some form of compensation proportional to the loss, turnover or volume of sales, or proportional to the size of the municipality they have to serve
  • it should be considered whether the retail price should be aligned with the wholesale price
  • Preferential financing: low-interest loans or interest-free loans
  • Reduce uncertainty in the market: decide what will happen to the price freeze in three months and who will then bear the burden.

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Government insists on fuel price cap but ready to negotiate with companies

According to László György, the government took the decision to freeze fuel prices in the interest of protecting families, but it is open to listening to the views of small businesses. On Monday morning, he met with VOSZ and Mobil Petrol, which operate small gas stations in most cities for precisely this reason.

The talks were forward-looking, a constructive approach to the situation was agreed, and the common goal is to contain inflation and protect Hungarian families from price hikes from abroad,”

continues the Secretary of State.

The Mobil Petrol representative reportedly indicated that his chain did not wish to take part in the demonstration and the collection of signatures, because the aim was not “to make the situation worse” but to find a constructive solution. Business representatives also offered to represent the views of other small businesses.

In response to a question, the politician said there was no indication yet that a gas station would go out of business, and there was no need to appoint a temporarily registered operator to run a service station due to closure.

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In November last year, the government fixed the price of 95 unleaded petrol and diesel at 480 forints per litre. Without this measure, people today would have to refuel at gas stations at prices well over 500 forints due to the changing global market. The fuel price freeze was recently extended for three months and will remain in effect until May 15.

The wholesale price of MOL already exceeded the retail price last Thursday, the oil company sold diesel for 493 gross forints and 95 gasoline for 480.4 forints at gas stations, while the government decided that they will not could not sell both fuels for less than 480 forints. Thus, since Friday, service stations are losing more than 8 forints if they sell a liter of gasoline, and 18 forints if they sell a liter of diesel.

Several owners have already said they can’t keep up and will either have to shut down or impose volume restrictions. Yet many gas stations are already asking their customers not to fill up.

Featured image: illustration via Pixabay

Louisa R. Loomis