As of November 18, Mol limited the amount of diesel that can be purchased at high-pressure wells to 100 liters per transaction. The restriction affects passenger and goods transport companies that, since March, can no longer buy fuel sold at the market price, rather than at the price cap, and use only diesel fuel for their work equipment – points out the Hungarian Road Carriers’ Association (MKFE) – the National Association of Large Entrepreneurs Together with the Carrier Industry Association (NiT Hungary).
According to information in the press, there is no shortage of fuel stock, so we are puzzled by Mol’s fuel restriction move
Tibor Árvay, secretary general of MKFE, told Index. We can recall that Mol already indicated in March: there was no question of a fuel shortage even then, but logistical problems arose, which is why they decided to maximize the amount that can be refueled as a transaction in order to distribute traffic proportionally between gas stations.
“If the goal is to replenish the strategic reserves, then Mol chose the worst possible time for the quantity limitation used as a means of this, because the Hungarian carriers are left without diesel during the Christmas peak operation. And this threatens the security of supply,” he added.
There may be a shortage of goods
“The formula is simple: the car whose job it is to deliver the goods to their destination – to the store shelves – spends its time going to refuel instead of transporting them,” Árvay pointed out. The maximum 100 liters of fuel that can be filled does not cover the daily consumption of a truck. Trucks can travel a maximum of 300 kilometers with this amount of diesel.
A significant part of the transport companies are family micro- and small businesses that do not have their own internal fuel wells, and it becomes unpredictable for them to procure the right amount of fuel. The restriction will force businesses to send their vehicles to refuel several times a day, which means a significant loss of time and unnecessary kilometers – additional costs – and makes it impossible to plan the strictly regulated working hours of car drivers.
Livelihoods may be at risk
All of this can threaten the survival of businesses and, through this, the livelihood of families, Tibor Árvay points out.
“One of our member companies supplying medicine to Ukraine reported that there is a HUF 100 million shipment of medicine in its cold storage. Therefore, not only the vehicle needs to be refueled, but also the separate engine belonging to the refrigerator – approximately 150-200 liters – of fuel. Since the contractor is responsible for the medicine, he has to choose between fueling the refrigerator’s engine and thus ensuring the warranty of the medicine, or refueling the car. With either option, you take a risk, with one you risk the integrity of the cargo, with the other, its delivery to its destination. What’s more, not only is he able to refuel at home to a limited extent, but due to the war in Ukraine, the supply there is not guaranteed either. If your goods are destroyed, your life will be destroyed along with it, because you cannot pay HUF 100 million in damages,” said the general secretary.
It is not good for the Hungarian economy either
Fuel restrictions also have a negative impact on the national economy. It threatens the survival of domestic carriers, and companies operating in international traffic are expected to be able to refuel their trucks abroad.
This results in another increase in costs, which factors can ultimately further stimulate domestic inflation.
Ten years ago, MKFE agreed with Moll that their member companies would use the fuel card provided by the Hungarian oil company. Precisely so that the number of refuelings abroad is reduced as much as possible, and diesel produced in Hungary is used in the fuel tank instead.
However, with the restrictions announced last Friday, the revenues that have so far strengthened the Hungarian economy as a result of refueling at Mol will be realized abroad as a result of refueling there, Tibor Árvay pointed out.
A small business that does not have its own internal well, which is directly supplied with fuel by contracted partners, such as Mol, but instead uses card refueling, is now unable to obtain the domestic product in Hungary, and is therefore forced to refuel abroad.
We can solve it smartly’
In addition to refueling abroad, the restriction can lead entrepreneurs towards the gray economy. “The idea of how to get fuel from other sources has already begun. And this does not benefit anyone,” the general secretary indicated. He reminded that the carriers have been out of the price cap since March and are refueling at market prices, so it is incomprehensible why restrictions are being introduced for refueling at market prices and not at official prices.
The price cap may need to be reconsidered
Interest groups therefore recommend further narrowing the range of consumers protected by the price cap, so that consumption is reduced where it does not harm national economic interests and does not threaten the stability of the supply chain.
“Just as in the case of utilities, the country quickly learned that what is not available for free or at a very favorable price must be saved. Whether it’s electricity, gas, or now fuel,” said Tibor Árvay.
According to MKFE, the application of the price cap should be reconsidered in three areas, in order to ensure that there is enough fuel left for the carriers performing the key task: for agricultural machinery, for taxis, and for residential consumption.
- The united sees that a agricultural machinery the price cap should be removed since the agricultural season is over. The fuel stocks purchased now are more likely to be used for storage for the later period. “It is completely unjustified that this circle can buy fuel in large quantities with a price cap at the expense of the carriers,” said Árvay.
- As the taxi drivers and taxi driving is not a matter of life. “The fact that a taxi operating with a higher tariff has to be refueled at a higher price, and as a result fewer passengers will board, does not endanger the supply chains,” added the general secretary, pointing out that even if they do not introduce the official price fuel consumption by taxi drivers, the Raising the HUF 480 price cap should definitely be considered.
- THE residential consumption and if we compare that 50 liters can be refueled per day, compared to the carriers’ 100 liters/transaction, we can see that the ratios have shifted quite a bit. After all, a car can travel approximately 500 kilometers with 50 liters of diesel in the worst case, while a truck can travel 200-300 kilometers with the same amount, but it travels much more per day. “You have to consider the price of not being able to refuel a truck. We are aware that this is not a very popular statement, but we believe that the price cap should also be reconsidered in terms of the general population, either by raising it to some level or by lowering the daily limit of 50 liters. These could have a restraining effect on consumption,” said Tibor Árvay.
Even if they limit the possibility of refueling for trucks, it should not be done “in such an inconsistent way”. Because at the moment it is not a question of the carriers not being allowed to refuel more, but a restriction has only been introduced as a transaction. So even beyond that, for example, 1,000 liters can be refueled, but all this in 10 installments. This calls into question the legality of the measure taken by Mol, he added.
They call for lightning-fast intervention
MKFE and NiT Hungary – understanding that security of supply is behind it – firmly ask Mol and the government to rethink the newly announced restriction and not to hit Hungarian road freight and passenger transport companies with the sanction – the organizations’ statement says .
Tibor Árvay said that after Friday’s announcement, they contacted Moll immediately. They haven’t received an answer so far, so they are running a round again. “Lightning-fast intervention would be necessary, as we are receiving feedback from more and more contractors that they cannot fulfill their orders, and this will probably continue to increase this week. And the month and a half before Christmas is the most critical period from this point of view,” he emphasized.
(Cover image: Ying Tang/NurPhoto/Getty Images)