Hungary: The capping of the prices of food and fuel extended until July 1

On Wednesday, April 27, Prime Minister Viktor Orbán has announced on his official Facebook page that the Hungarian Government will extend the measures that maximize the consumer prices of certain food items and automotive fuel. The food price cap regulation (link) and the price cap on fuel (link) will remain in force until July 1, 2022.

Last November, the government had put a cap of €1.27/liter on the price on automotive fuel (at current exchange rate). Later, on January 12, Mr. Orbán has announced a new measure by the government, maximizing the prices of basic staple food items, namely sugar, wheat flour, sunflower (cooking) oil, pork (specifically, pig thigh), chicken (breast), and milk (2.8% milk cow’s milk), at their respective price levels as of October 15, 2021.

The government had communicated that the reason for these measures were the rampant inflation both Hungary, as well as the global economy, had been facing since the pandemic crisis and that the goal had been to keep down food inflation.

The news portal Portfolio.hu previously reported on Tuesday, before the announcement of the price cap extension, that last weekend, there had been an unusual peak shopping rush at grocery retailers throughout the country as consumers tried to stockpile on basic foodstuffs before the price cap measure expired.

The news portal also reported that based on their projections, if the price cap had indeed ended in May like the original government decree prescribed, then most of the previously government-controlled food prices would immediately shoot up.

According to the portal’s own calculations, the price of chicken breast would go from €4.24 to €5.3 per kilogram, the price of pig thigh would increase from €3.71 to €4.24/kg, the price of UHT cow’s milk would go from €0.73 per liter to €0.87, flour would go from €0.56 to €0.72 and the price of sunflower cooking oil would shoot up from €1.91 to €2.65.

These will continue to be economic issues that the newly formed administration will have to face. On April 3, general elections were held in Hungary, in which the Fidesz-KDNP coalition, led by Mr. Orbán, has won another two-thirds supermajority.

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