Overtaxation? Fuel prices set to rise in Hungary as excise tax hike takes effect 1 January
Starting 1 January, Hungarians can expect an increase in wholesale fuel prices due to a higher excise tax on gasoline and diesel. #fuel #diesel #gasoline #petrol
Starting 1 January, Hungarians can expect an increase in wholesale fuel prices due to a higher excise tax on gasoline and diesel. According to fuel industry expert Eszter Bujdos, this tax hike will likely be reflected in consumer prices in phases, further burdening drivers across the country. She also criticised the government for overtaxing beyond EU requirements, which could exacerbate the situation.
Tax hike details and price implications
The excise tax on wholesale fuel prices will increase by HUF 6.25 per litre for gasoline and HUF 5.86 per litre for diesel. Including VAT, this translates to an HUF 8 rise for gasoline and HUF 7.4 for diesel. With these adjustments, average prices as of 31 December 2024 stand at:
- 95-octane gasoline: HUF 617/litre (EUR 1.50)
- Diesel: HUF 637/litre (EUR 1.55)
The exact method and timing of passing on these costs to consumers remain unclear, Index writes. However, Bujdos, managing director of holtankoljak.hu, noted that rising operational expenses—such as the minimum wage increase—are adding further pressure on gas stations.
Currency fluctuations and geopolitical risks
Bujdos pointed out that Hungary’s weakening currency against the dollar is another significant concern, as it could further inflate fuel prices. While geopolitical events like the Russia-Ukraine conflict or tensions in the Middle East may cause short-term volatility, the long-term impact on global oil prices depends on the production decisions of OPEC countries.
Government oversteps EU tax expectations
The government has justified the excise tax hike as a response to EU regulations, which mandate a minimum excise duty for member states. However, Hungary’s tax rates surpass these requirements. Based on a euro exchange rate of HUF 411, the excise tax exceeds EU minimums by HUF 14 per litre for gasoline and HUF 17 for diesel.
“The EU doesn’t demand such a high tax burden as the Hungarian government is imposing,” Bujdos emphasised, calling the policy an example of overtaxation.
Hungary in regional comparison
Fuel prices in Hungary sit in the middle range compared to neighbouring countries. According to data from the Hungarian Central Statistical Office (KSH), Poland, the Czech Republic, Romania, and Bulgaria offer cheaper fuel, while Austria, Croatia, Slovakia, and Serbia are more expensive.
Looking ahead: Higher fuel prices in 2025?
Bujdos predicts that the average price for gasoline could reach HUF 630–640 (EUR 1.60) per litre in 2025, driven by a combination of currency devaluation and global oil price trends. She estimates that Brent crude oil prices will hover around USD 75 per barrel, while domestic fuel prices will continue to depend heavily on the forint’s exchange rate.
“The forecasts for the forint are not promising, so drivers should brace for further price increases in the coming year,” she concluded.
Read also:
- Fuel prices in Hungary set to soar as government plans new tax hike on gas stations
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