Hungary defends its fuel price cap following EU’s infringement procedure

The Hungarian government defended its decision to cap fuel prices by citing the need to protect its security of supply in response to the launch of an infringement procedure against it earlier by the European Commission.

“Today, the Commission decided to open an infringement procedure against Hungary for having introduced measures going against Internal Market provisions,” the European Union (EU) Executive said in a statement on Friday.

The Commission recalled that Hungary has imposed different fuel prices for vehicles with foreign number plates and those with Hungarian number plates, Xinhua news agency reported.

The latter –including tractors and agricultural machinery with Hungarian documents –are entitled to 60 to 70 per cent lower official fuel prices.

“In contrast, all other vehicles with a foreign number plate cannot benefit from such reduced prices,” the Commission said.

The Hungarian government capped the price of petrol and diesel at 480 Hungarian forints ($1.21) per litre on November 15, 2021, and has extended the measure until October 1, 2022. Without the cap, the price per litre is more than 800 forints.

The Commission has called on the Hungarian government to comply with EU law provisions with regard to the free movement of goods and services, including transport services, under the single market.

In her response, Hungary’s Justice Minister Judit Varga cited the government’s concerns over the security of supply, arguing that when the price cap was introduced, it was applicable to everyone, but the high inflation and the Russia-Ukraine conflict have triggered “petrol tourism,” which threatens the security of supply to such an extent that the government had no choice but to removed vehicles with foreign license plates from the range of beneficiaries.

“The protection of the security of supply as a public order reason also appears in the jurisprudence of the EU courts,” Varga said, adding that as before, the government of Hungary was ready for “constructive legal dialogue as long as it was based on mutual respect”.

Hungary has two months to address the concerns raised by the Commission. (1 US dollar 397.76 Hungarian forints)

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