Hungary fuel price cap could lead to shortages - MOL CEO

MOL, which owns the largest network of service stations in the country, has previously called for the cap to be phased out. The limit was introduces last November and set the retail price for both 95-octane gasoline and diesel at 480 forints ($1.20) a litre.

Hungary's cap on fuel prices should be lifted as it will "sooner or later" lead to shortages, the CEO of Hungarian oil and gas company MOL Zsolt Hernadi said in an interview on ATV late on Sunday. Hernadi said Hungary was facing an "extremely dangerous" situation as the fuel price cap was driving up consumption.

"This raises the question of how long this can be done," Hernadi said. MOL, which owns the largest network of service stations in the country, has previously called for the cap to be phased out.

The limit was introduces last November and set the retail price for both 95-octane gasoline and diesel at 480 forints ($1.20) a litre. Prime Minister Viktor Orban's government introduced the cap, now set to run until October, to shield consumers from inflation now at its highest level in two decades. The government limited the cap to cars with Hungarian licence plates, a move that has triggered a row with the European Union.

Last month, MOL announced passenger car drivers in Hungary would be limited to buying 50 litres of fuel a day at fuel stations, halving the previous limit. Hernadi said Hungary should be stockpiling fuel right now as 65% of MOL's refinery in Hungary will shut down for maintenance in August, while its refinery in Slovakia is currently not working and due to restart on July 20 after maintenance.

Due to the above reasons, stockpiling is going slower than planned, meaning MOL will need to ask for part of the country's strategic fuel reserves to be released, Hernadi said. A government spokesperson was not immediately available to comment on Hernadi's remarks.

As global supply chains are not as secure as before, a fuel shortage cannot be completely ruled out, Orban's chief of staff said at a briefing last month. But Gergely Gulyas added a shortage was unlikely as Hungary has fuel reserves that could last up to six months.

($1 = 400.2600 forints)