Hungary defends petrol price cap against EU criticism

Hungary defends petrol price cap against EU criticism

Hungary defends petrol price cap against EU criticism

Hungary defends petrol price cap against EU criticism (Credit: Google)

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  • Hungary’s Prime Minister Viktor Orban defends a petrol price cap on Friday.
  • Petrol prices would be between 700 and 800 forints per litre, Viktor Orban.
  • Irish no-frills carrier Ryanair has called the tax “beyond stupid”.
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Hungarian Prime Minister Viktor Orban defended a discriminatory petrol price cap on Friday, claiming that runaway inflation and the economic fallout from Ukraine’s war justified it.

“We hope the EU sees that there is an extraordinary situation,” Orban said during a radio interview.

With Hungary’s inflation reaching a 20-year high in May and the country’s economy being impacted by the Ukraine conflict, the leader argued that such “extraordinary measures” were required.

Orban — who imposed a state of emergency in Hungary late last month citing the challenges posed by the war — has frequently clashed with Brussels.

Orban said that without the cap — introduced last November — of 480 forints ($1.30) per litre, petrol prices would be between 700 and 800 forints, as elsewhere in Europe.

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Budapest said last month that the price cap would only apply to cars with Hungarian licence plates in order to prevent cross-border “fuel tourism”.

But “the difference in treatment seems to amount to indirect indiscrimination,” Thierry Breton, the EU’s internal markets commissioner, said in a letter sent to Budapest this week and seen by AFP.

Breton suggested that the measure “might constitute a violation of EU law” and lead to infringement proceedings against Hungary.

Read more: Hungary’s PM criticizes the European Commission

To fund a range of price caps on energy and foodstuffs, Hungary has also imposed a windfall tax on companies’ “extra profits”, mainly targeting the banking and energy sectors, but also airlines.

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Irish no-frills carrier Ryanair has called the tax “beyond stupid” and urged Budapest to scrap it.

The tax of between 10 and 25 euros ($10.50 and $26.30) per departing passenger from July 1 “will irreparably damage Hungarian tourism, connectivity, traffic and jobs,” it said.

On Thursday, the airline said it would charge passengers even on bookings prior to that date, and those unhappy passengers could cancel and receive a refund.

Marton Nagy, Hungary’s economic development minister, said the move was “unacceptable” and that the country’s consumer protection watchdog would investigate.

“The government expects the extra-profit special taxes to be paid by all companies and not passed on to the population, as the price of the war should not be paid by Hungarian families,” Nagy said.

Read more: High stakes as Hungary eyes Russian oil ban exemption

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