Prime Minister Viktor Orbán has announced that Hungary’s government will introduce a price cap on gasoline and diesel at fueling stations beginning at midnight local time.

The move came against the backdrop of soaring global oil prices as the Iran war, now in its second week, affects countries and infrastructure critical to the production and movement of oil and gas.

In a video posted on social media, Orbán said that the “international oil price explosion has reached Hungary as well,” and that the government would cap the price of gasoline at 595 forints ($1.75) per liter and diesel at 615 forints ($1.81) per liter.

He added that the capped price would only apply to vehicles with Hungarian license plates and registration documents, and that Hungary would free up its oil reserves to ensure adequate supply.

The decision, unveiled as part of efforts to manage rising fuel costs, reflects the government’s attempt to shield consumers and businesses from increasing energy prices.

The Hungarian government has presented the price cap as a step aimed at stabilizing domestic fuel prices and easing the financial burden on citizens.

Rising energy costs have become a major concern across many parts of Europe in recent years, placing pressure on households and businesses alike. By limiting how much fuel stations can charge, the government hopes to provide short-term relief and prevent further increases at the pump.

Orbán’s populist government, which is facing a major challenge against a center-right opponent in elections next month, placed a similar cap on fuel prices in November 2021 as prices soared following mass disruptions caused by the COVID-19 pandemic.

The cap was in place for more than a year before the government scrapped it due to soaring consumption and fuel shortages stemming from falling imports and production problems.

Although Orbán’s announcement focused on the immediate implementation of the fuel price cap, further details about the policy’s duration and enforcement mechanisms are expected to emerge as authorities roll out the measure.

Governments typically accompany such interventions with monitoring systems to track compliance among retailers and ensure that the capped prices are applied consistently across the country.

By setting the cap to take effect at midnight local time, the Prime Minister signaled the urgency with which authorities intend to address the issue.

As the policy begins to take effect across Hungary’s fueling stations, attention will likely turn to how the cap is implemented and how markets respond in the days and weeks ahead.

Orbán Urges EU To Lift Sanctions On Russian Fossil Fuels

Earlier today, Orbán, considered the Kremlin’s closest partner in the EU, urged the European Union to lift all sanctions on Russian fossil fuels to remedy the spikes in energy prices caused by the Iran war.

Orbán’s government has long opposed EU efforts to cut Russian energy imports, and along with neighboring Slovakia has maintained and even increased supplies of Russian oil and gas since Moscow launched all-out war on Ukraine on Feb. 24, 2022.

Both countries have received a temporary exemption from an EU policy prohibiting imports of Russian oil, and have until recently taken Russian crude supplies through the Druzhba pipeline, which crosses Ukraine.

However, oil deliveries through the Druzhba have been halted since January 27, leading to an escalating feud between Hungary and Ukraine.

The Ukrainian government says that a Russian drone strike damaged the pipeline’s infrastructure, but Orbán has accused Ukrainian President Volodymyr Zelenskyy of deliberately holding up the oil supplies.

In response, Orbán vetoed a new round of EU sanctions against Russia, and is blocking a major 90-billion euro ($106 billion) EU loan for Ukraine until flows are resumed.

Orbán, lagging in most polls just a month before the election, has accused Zelenskyy of seeking to cause an energy crisis in Hungary, in order to influence the outcome of the vote — part of his government’s sweeping anti-Ukraine media campaign leading up to the April 12 ballot.

Further inflaming tensions, Hungary on Thursday temporarily detained seven Ukrainian state bank employees and seized two Ukrainian armored cars carrying tens of millions of euros in cash and gold across Hungary on suspicion of money laundering.

Ukraine has insisted the cash shipment was part of regular services between state banks, and strongly denied the money laundering allegations.