Fuel shortage seems to hit Hungary in two weeks

Experts believe there will be a fuel shortage during summer, even if the accident in the Schwechat oil refinery did not take place. Therefore, Austria and Hungary made a part of their strategic fuel reserves available for domestic consumption last week. However, it seems those measures will not provide long-term solutions to ease the problems.

Strategic fuel reserves released

Blikk.hu says that in July and August fuel consumption was 30-40 percent higher than in January. For this reason, the fact that the OMV’s refinery in Schwechat, Austria, temporarily stopped its operation due to an accident during scheduled maintenance poses a huge issue. As the international press wrote, a distillation tower was damaged, and two workers suffered injuries. Based on the plans, the refinery would have resumed operation by 10 June. But the damage is so severe that the company has not announced yet when they might restart production.

This problem affects not only Hungary but also Slovakia, the Czech Republic and Poland. Currently,

OMV petrol stations provide 17-19 percent of the gasoline and 13-15 percent of the diesel supply in Hungary –

 hvg.hu wrote. 

Thus, Austria and Hungary made a part of their strategic fuel reserves available for domestic consumption last week. The Hungarian government’s decree gave 18,000,000 litres of 95 gasoline and 29,000,000 litres of diesel for the OMV. The company will have to return it though: 40 percent until 31 August and the remaining 60 percent until 31 October. According to the decree, the Hungarian Hydrocarbon Stockpiling Association will determine the price.

• Read also: Shockingly high fuel prices for foreigners from Wednesday in Hungary!

MOL provides 70 percent of the demand

Tamás Pletser, an expert in the gas and oil sector at Erste Group, said that substantial maintenance projects ought to be carried out every 4 to 5 years. However, companies had to postpone them because of the pandemic. Therefore, they take place now simultaneously worldwide. 

Mr Pletser said that the OMV would like to provide fuel support with the help of the Austrian reserves. However, there is a specific order. Satisfying domestic demand comes first. Foreign stations can only come second. Moreover, Hungary is probably at the bottom of the list because the government’s price cap makes the business unprofitable. After the introduction of the price cap, several fuel retailers left Hungary, and now the OMV seems to drop out of the market as well.