Gasoline is becoming more expensive, close to its historic peak

The gasoline rushes to a historic peak

On Wednesday, the price of fuels at domestic wells will change, according to information, the average price of petrol per liter will increase by 2 forints to 441 forints, while the average price of diesel per liter will not change this time, remaining at 443 forints.

This means that the current levels correspond to a multi-year peak: the last time petrol was more expensive on September 14, 2012, ie almost 9 years ago, was the average price per liter of HUF 445.8.

And on September 13, 2013, diesel fuel cost more than now, almost 8 years ago, when an average of 444.1 forints per liter was charged for it.

In our fuel price database, which has been maintained for more than 20 years, the highest price of petrol was reached on April 20, 2012, when it was HUF 453.8 per liter, while on January 20, 2012, diesel was asked to reach HUF 450.1 per liter.

We have written several times about the development of domestic fuel prices, even in mid-May we wrote that due to the strengthening of the forint in the short term fuel prices are expected to decrease temporarily, but in the longer term it is worth preparing for rising petrol and diesel prices. demand for oil will also rise, which could result in more expensive gasoline and diesel.

Oil prices continue to rise

Domestic fuel prices are affected by several factors, including the world market price of crude oil, refinery margins, taxes and the exchange rate of the forint against the dollar. In 2012, for example, when the domestic gasoline price was at an all-time high, the Brent price closed at $ 119 on April 20th.

If we return to the current situation, oil prices started to soar back in November, and have more than doubled since then. A major correction was still visible in March, but this long-term uptrend has not been hurt, and oil is clinging up again, and not only the Brent but also the WTI type has come close to $ 75 a barrel. As mentioned above, this increase may even continue in parallel with economic opening, as strong growth in fuel demand is expected to be seen, of course the open question remains how the oil cartel will decide on the previous cut-off In this case, it can also have a negative effect on prices.

There are significant differences between the oil price forecasts of individual analysts, but there are more and more people who envision higher oil prices than at present.

  • A Bank of America says the price of Brent-type oil could reach $ 100 a barrel in 2022. The bank expects the price of Brent to average around $ 75 a barrel next year, which is $ 15 higher than the previous estimate of $ 60. However, higher prices can only be temporary, as these will encourage shale oil producers to return, which could push prices down in 2023.
  • Goldman Sachs investment bank says Brent oil price could reach average level of $ 80 per barrel in third quarter, but significant upward stabs are conceivable temporarily.
  • Not everyone is so optimistic about oil prices in the US Energy Information Agency (EIA), for example, writes in its report of 8 June that in the third quarter (July-September) the Brent exchange rate can average around $ 68 per barrel. After that, however, in 2022, thanks to higher OPEC + production and returning shale oil producers, an average price of $ 60 may be formed. The agency estimates that supply and demand will be able to balance sometime in the third quarter of this year, and they estimate that consumption could average 97.7 million barrels per day in 2021 and 101.3 million barrels next year.
Source: EIA

However, it should also be noted that the current level of activity is not particularly strong in the oil industry. The number of actively operating oil rigs at the end of May was 1,262, according to Baker Hughes, which is not much higher than the 1,016 units seen at the historic low last October. In addition, there will be a lack of investment, which could cause more headaches in the long run. Norwegian research firm Rystad Energy even estimated in February last year that upstream investments could be around $ 530 billion in 2020 and 2021. By comparison, in 2020, investment fell short of this estimate by $ 145 billion, while this year the difference could be $ 140 billion. Shale oil production is most affected by the cuts, although most hope for a rapid return.

The forint is strengthening

The forint has practically strengthened against the dollar since April, and at the end of June the exchange rate was already at the level of 283 forints / dollar. This was helped by the fact that Deputy Governor Barnabás Virág said that a new chapter in monetary policy would start in June and that preventive monetary tightening should be considered while maintaining the asset purchase program.

In the meantime, however, the Fed also held an interest rate decision meeting, where policymakers admitted that there could be as many as two interest rate hikes in 2023, which pushed the dollar thoroughly, partly due to the weakening of the forint to 300 forints / dollar.

Subsequently, on Tuesday last week, the MNB launched its interest rate hike cycle and raised the key interest rate to 0.9 per cent, and announced that the need to tighten monetary conditions would be reviewed on a monthly basis. For this, the exchange rate of the forint started to strengthen again against the dollar, and the quotation is currently close to the level of 294 forints / dollar.

This is important for domestic fuel prices because the stronger the dollar and the weaker the forint, the more expensive the oil and thus the price of petrol and diesel will be expressed in forints. The same is true the other way around, ie the stronger the forint and the weaker the dollar, the lower the price of crude oil and thus petrol and diesel in HUF. This is possible because the oil industry works largely with dollar-based settlement.

In short: I can buy crude oil cheaper in HUF if the forint is stronger.


In addition to oil prices and the forint / dollar exchange rate, two other factors play a role in fuel prices. One is the gap between petroleum products and crude oil, where an improvement has already been observed during the spring. The other is the excise tax, the rate of which is not expected to change in the short term.

All in all, then:

  • Oil prices continue to rise after a halt in March, with more and more analysts coming up with ever-higher oil price forecasts. Here, therefore, prices can be expected to rise in the short and long term.
  • The strengthening of the forint seen in recent days may somewhat offset the expected rise in oil prices. On the other hand, if the domestic currency depreciates against the dollar, not much good can be expected in terms of fuel prices.
  • Refinery margins are expected to rise further this year, with an improvement in the spring.
  • No change in the rate of excise duty is expected in the short term.

Overall, therefore, there are many variables, so it is difficult to give an accurate estimate of the evolution of its fuel price, but for the time being, it can be expected that an increase in oil prices may be the dominant factor. On the other hand, the rise in prices may be dampened by the strengthening of the forint, which may be a residual trend in the medium term, especially if we expect that the US Federal Reserve will not reach interest rates for years to come (and it is worth adding that the dollar also strengthened for the two interest rate increases due in the next two months, as if the US Federal Reserve had already raised interest rates).

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