Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2022-6/2417 – Updated – measures in Hungary
Country | Hungary , applies nationwide |
Time period | Temporary, 01 February 2022 – 01 October 2022 |
Context | COVID-19, War in Ukraine |
Type | Legislations or other statutory regulations |
Category |
Responses to inflation
– Support for fuel expenses |
Author | Nóra Krokovay (KOPINT-Tárki) and Eurofound |
Measure added | 24 May 2022 (updated 06 September 2022) |
Inflation in Hungary reached 8.5% in March 2022, and the country’s central bank predicted it could exceed 9% by year’s end. In order to react to increasing inflation, Government issued decree 6/2022 concerning food items and 57/2022 concerning fuel prices. The measure was put in place to offset soaring inflation, the reason for which is “the conflict in Ukraine”, according to the government.
The government has frozen selected food prices at their level on 15 October 2021. For fuel the price cap was set at HUF 480 per litre (about €1.23). The price limit in place since 1 February 2022 concerns basic food items such as sugar, flour, sunflower oil, pork legs, chicken breasts and other chicken parts and milk. Retailers must ensure the items remain in stock. The prices are capped also for the online retail sector. Hungary’s government implemented the price caps in response to surging inflation and a record weakness of the forint against the euro. The price caps were extended until 1 July 2022.
The following updates to this measure have been made after it came into effect.
30 July 2022 |
Under government decree 94/2022, the government decided to change the target group for the fuel price cap, excluding the following groups:
|
18 June 2022 |
The government has extended the price cap on fuel and basic food items until 1 October 2022. |
Retail turnover rose by 7.3% month-on-month in March 2022 and by 16.2% year-on-year, according to statistical office data. Analysts however said that the increased consumption is mainly seen in non-food items and is not a result of the price caps on basic food. Food sales rose by 0.2% while fuel sales rose by 50%.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers | Does not apply to businesses | Applies to all citizens |
Actors | Funding |
---|---|
National government
Company / Companies |
National funds
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | No involvement | No involvement |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
No involvement was reported.
The Trade Union of Retail Workers predicted that there would be a rush on stores as a result of the price caps. The Független Szakszervezetek Demokratikus Ligája (LIGA) and Munkástanácsok Országos Szövetsége (MOSZ) leaders said the price caps were only temporary and that higher-than-expected inflation would call for a second round of wage negotiations mid-year. LIGA said the price cap was an important measure in putting breaks on inflation, which was beneficial especially for low-income groups. They warned however that the rising cost of fuel increases the cost of going to work, and affects employers, so in the long term will impact the labour market. Trade unions have proposed the government should raise the fuel travel compensation employer can give tax-free to employees from the current HUF 15 per kilometre to HUF 50 (about €0.13) per kilometre.
In August 2022 the Hungarian Mineral Oil Association (MÁSZ) warned that as many as half of its 1,000 member petrol stations may be closing as they will no longer be able to supply fuel at the capped price.
This case is sector-specific
Economic area | Sector (NACE level 2) |
---|---|
G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles | G47 Retail trade, except of motor vehicles and motorcycles |
This case is not occupation-specific.
Citation
Eurofound (2022), Price cap on fuel and basic food items, measure HU-2022-6/2417 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2022-6_2417.html
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