The government proposes to end 'protected prices' on fuels

HUNGARY - In Brief 18 Jun 2026 by Istvan Racz

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It seems Mr. Trump's latest intermediate peace deal with Iran plays to the hands of the new government of Hungary, through its beneficial impact on global energy prices. Last night, PM Magyar announced that his government is proposing to end the existing system of 'protected' retail fuel prices, which was introduced in March, in view of the Middle East war, essentially capping the retail prices of the two basic types of motor fuels, 95 octane gasoline and diesel, with a peak negative impact of 1.1% on the whole CPI in April. Mr. Magyar said earlier that they were aiming to lift those caps when market conditions would be right. Now, he is saying that this moment has arrived, as already this week, the uncapped retail prices of the regulated items may fall by HUF10-15 per liter, i.e. by about 2% below the administrative cap.In a long-term perspective, this move should be seen as positive, as it removes one of a number of administrative distortions to the market, the same way as last week's government decision to end the also existing 'interest rate stop' scheme, which has been administratively depressing the interest rates banks could effectively charge on about one-quarter of the outstanding stock of mortgage loans to households. These measures will both reduce government interference with market mechanisms, raise the actual role of MNB policies and, indirectly, take Hungary closer to eventual euro convergence.In short term, the situation is slightly different, though. First, at this point, we cannot confirm that fuel retail prices are indeed on their way to fall below the caps in the forthcoming few days. According to data from Holtankoljak.hu, yesterday's average price...