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Database of national-level policy measures

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

Price cap on fuel and basic food items

Benzinárstop és élelmiszerárstop

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)

Background information

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.

Content of measure

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.

Updates

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:

  • vehicles with foreign licence plates
  • company vehicles but not taxi drivers
  • consumers buying petrol in containers and not filling the car's fuel tank
18 June 2022

The government has extended the price cap on fuel and basic food items until 1 October 2022.

Use of measure

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%.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

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
  • Main level of involvement: N/A

Involvement

No involvement was reported.

Views and reactions

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.

Sectors and occupations

    • 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.

Sources

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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