Despite falling wholesale prices, petrol remains expensive at the pump

The pricing at domestic petrol stations is practically incomprehensible: While wholesale prices for petrol and diesel fell continuously last month, motorists noticed virtually no change. Now, however, everything is in place to ensure that the prices of petrol and diesel really fall, writes Terms and Conditions.

As Hungary today As reported yesterday, the wholesale price of petrol and diesel could drop significantly from Thursday, by HUF 8 (EUR 1 = HUF 393) for petrol and HUF 6 for diesel. This means that since July 10, the price of petrol has fallen by HUF 32 per litre and the price of diesel by HUF 43. However, almost none of this was passed on to retail prices last month, which is why Terms and Conditions recently pointed out

There is a strong suspicion that the price reduction due to retailers is not reflected at domestic petrol pumps.

This is also confirmed by last month's data: the average price of 95 petrol on July 10 was HUF 616 and of diesel 623, according to the fuel price monitoring blog. Holtankolyak. If the wholesale price reduction is carried out down to the last cent, petrol would currently cost 584 forints and diesel 580 forints. For comparison: on the weekend of August 20, a litre of petrol and diesel cost around 610 forints at most petrol stations. It is therefore highly questionable what drivers can expect from Thursday onwards.

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The last time oil prices were this low was in June. Brent, the benchmark price for oil on the European market, was at USD 77, but the forint, another important price factor, has also developed positively. The Hungarian currency was last quoted at 353 against the dollar in early June, similar to the current oil price level, when gasoline cost HUF 590 per liter and diesel HUF 596. There would therefore still be room for price reductions after that if retailers continue to pass on the reduction in the wholesale price to retail prices.

This was followed by another wave of price increases, which made the government nervous. Prime Minister Viktor Orbán also sent a message to the representatives of the sector. He stated that the previous agreement had been broken and announced: “We will not need to be told twice.”

Photo via Facebook/Shell

Previously, Eszter Bujdos, Managing Director of Holtankolyakexplained Terms and Conditions The difficult pricing practices were due to traders trying to make up for their previous losses. In May, the opposite happened: wholesale prices did not fall, but retail prices did.

There is no legal requirement that the retail price must fall when the wholesale price falls. In May, the opposite happened: the wholesale price remained unchanged while the retail price was reduced,”

she explained.

Petrol prices in the region in July. Graphic: KSH

However, this still does not explain why MOL, a dominant player in both the retail and wholesale markets, does not track the price movements of Brent oil and forint. One explanation could be that MOL needs to monitor prices not only in its own country but also in neighboring countries, where prices have increased significantly recently, which has reduced government pressure on the sector. Romania recently saw a significant tax increase and the price of gasoline approached HUF 600 in July. This is likely to push the average price in neighboring countries significantly higher.

Diesel prices in the region in July. Graphic: KSH

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Via Világgazdaság; Featured image via Pixabay