Petrol Prices Remain High Despite Wholesale Price Drop
The pricing practices of domestic petrol stations in Hungary have raised eyebrows lately, with wholesale prices for petrol and diesel steadily dropping over the past month, but consumers seeing little to no change at the pump. However, a recent report from World Economy indicates that there may finally be some relief in sight for motorists.
Based on information from Hungary Today, starting from Thursday, the wholesale price for petrol and diesel is expected to decrease significantly, by HUF 8 for petrol and HUF 6 for diesel. This equates to a total drop of HUF 32 per liter for petrol and HUF 43 for diesel since July 10. Despite these decreases, retail prices have not reflected these changes, leading to suspicions about the retailer’s pricing strategies.
Data from last month shows that the average price for 95 petrol on July 10 was HUF 616 and diesel was HUF 623. If the full wholesale price cut is passed onto consumers, petrol would cost around HUF 584 and diesel HUF 580. However, most petrol stations were still selling petrol and diesel at around HUF 610 per liter over the weekend of August 20, raising doubts about whether consumers will see the anticipated price drops.
Oil prices have not been this low since June, with Brent, the European market benchmark, priced at USD 77. The forint has also been performing well, with exchange rates similar to those seen in June when petrol was priced at HUF 590 per liter. Despite these factors, retailers have been slow to adjust prices, prompting Prime Minister Viktor Orbán to issue a warning to the sector.
Eszter Bujdos, managing director of Refueling, explained to World Economy that pricing difficulties were due to traders trying to compensate for previous losses. She noted that in May, retail prices were reduced despite wholesale prices remaining stable, highlighting the lack of a legal requirement for retail prices to mirror wholesale changes.
The situation is further complicated by factors impacting neighboring countries, such as Romania, where recent tax increases have driven petrol prices close to HUF 600 per liter. This external pressure, combined with the pricing practices of retailers, has contributed to the current pricing discrepancies in Hungary.
As consumers await the expected price drops in petrol and diesel, the industry’s pricing practices continue to be scrutinized. With the government pushing for more transparency and accountability in the sector, it remains to be seen how retailers will respond to the changing market dynamics.
