Hungary fuel price cap will lead to shortages, says MOL boss

BUDAPEST (Reuters) -Hungary’s cap on fuel prices should be lifted because it will lead to shortages “sooner or later”, the CEO of Hungarian oil and gas company MOL said.

Zsolt Hernadi, in an interview on ATV late on Sunday, said Hungary was facing an “extremely dangerous” situation as the fuel price cap was driving up consumption.

“This raises the question of how long this can be done,” Hernadi said.

MOL, which owns the largest network of service stations in Hungary, has previously called for the cap to be phased out.

The limit was introduced last November and set the retail price for both 95-octane gasoline and diesel at 480 forints ($1.20) a litre.

Prime Minister Viktor Orban’s government introduced the cap, now set to run until October, to shield consumers from inflation now at its highest level in two decades.

Last month MOL announced passenger car drivers in Hungary would be limited to buying 50 litres of fuel a day at its stations.

Hernadi said Hungary should be stockpiling fuel right now as 65% of MOL’s refinery in Hungary will shut down for maintenance in August, while its refinery in Slovakia is currently not working and due to restart on July 20 after maintenance.

Due to the above reasons, stockpiling is going slower than planned, meaning MOL will need to ask for part of the country’s strategic fuel reserves to be released, Hernadi said.

“The long-lasting war (in Ukraine) and Brussels’ sanctions have caused fuel prices to soar across Europe,” a government spokesperson said in an emailed reply to Reuters.

Without the price cap the price of fuel would be nearly twice as high as it is now, he said, adding that the “government is constantly analysing the state of the fuel supply and will make a decision on the price caps.”

($1 = 400.2600 forints)

(Reporting by Anita KomuvesEditing by Mark Potter and Susan Fenton)