Expensive fuel: Hungary introduces the official maximum price for gasoline

In view of rising fuel prices, the Hungarian government has officially set the maximum price for gasoline.

A liter of super (95 octane) and a liter of diesel may cost a maximum of 480 forints (1.33 euros) each from November 15th.

Chancellery Minister Gergely Gulyas announced this to journalists in Budapest on Thursday.

The regulation does not apply to other types of gasoline.

It will initially remain in force for three months. At the moment, a liter of super (95 octane) in Hungary costs an average of 506 forints and a liter of diesel 512 forints.

After the announcement by the minister, the share price of the Hungarian oil company MOL on the Budapest Stock Exchange fell by four percent.

In Germany, too, fuel prices have risen further on a weekly basis, according to surveys by the ADAC car club.

A liter of Super E10 costs an average of 1.689 euros across Germany.

This corresponds to an increase of 0.9 cents compared to last week.

The price of diesel has also increased: a liter costs 1.569 euros on average across Germany and thus 0.4 cents more than in the previous week.

Shitstorm for Barley

In Germany, too, there is no lack of proposals from politics as to how the heavy burden on consumers from the rise in energy prices could be alleviated.

After EU politician Katarina Barley had received a real shit storm for the idea that consumers should simply heat less and put on a warm sweater, an energy price cap was discussed, as was the proposal to reduce taxes and duties on petrol.

Left parliamentary group leader Dietmar Bartsch and transport minister Andreas Scheuer have spoken out in favor of this.

But you cannot get out of a dilemma: If politicians want to reduce CO2 emissions for climate protection, they have to make petrol more expensive and at the same time cannot make it cheaper for reasons of consumer protection.

Other ideas against expensive gasoline

There are other ideas as to what could be done. The “Austrian model” is the name of a concept from the neighboring Alpine country that was recently extended to the end of 2022. It stipulates that petrol stations are only allowed to raise prices once a day, always at noon at noon. The inventors' hope was, as it were, that fewer opportunities for price increases would also dampen the price level. At the time, however, economists working with Justus Haucap from Düsseldorf demonstrated in simulations: Exactly the opposite is the case. Petrol stations and oil companies prefer to raise prices a little more if they know that no further price increases are allowed on that day.

Another procedure is called the “Luxembourg model”, in which the petrol stations are given an upper limit for each individual price increase.

However, there is a risk that petrol stations will then use this upper limit more often than they would have done without the upper limit.

In any case, in experiments by the Düsseldorf competition researchers, the average price tended to be higher.

A third variant is called the “Western Australian model”.

In Western Australia, petrol stations must report their prices for the next day to the Department of Commerce at 2 p.m.

That should bring more reliability for the motorist.

In simulations, it resulted in neither higher nor lower prices.