Brussels objects to cheap Hungarian fueling

The European Commission has launched infringement procedures against Hungary. Brussels is objecting to the fact that only Hungarian drivers can refuel at the discounted price while foreign drivers have to pay market prices at Hungarian gas stations. Proceedings have also been launched against Hungary for imposing a notification obligation on cereal exports given the wartime situation and in given cases the government has the right to buy it.

“The Commission decided to open an infringement procedure against Hungary … for having introduced measures going against Internal Market provisions,” reads the statement from Brussels put out on Friday.

Brussels thinks it’s bad that we have cheap fuel prices

According to Brussels, Hungary’s policy that only cars with domestic plates can refuel at discounted prices – 480 HUF per liter – while foreign cars must pay the market price, is discriminative and thus violates EU law.

“The Commission is requesting the Hungarian authorities to comply with EU law provisions with regard to the free movement of goods and services including transport services, the freedom of establishment, the free movement of citizens and workers, the principle of non-discrimination as well as rules on notifications under the Single Market Transparency Directive,” reads the statement.

They mentioned the ongoing war as a reason to end this policy:

Ensuring the proper functioning of the Single Market is of particular importance in the current geopolitical situation as it represents the main instrument to overcome the current economic disruptive effects resulting from Russia's invasion of Ukraine.

The brief states that one-sided, nationalistic measures and discriminatory policies cannot be used as a solution since they violate the “principles of free movement in the Single Market”.

Does state supervision of the grain market violate EU law?

The cereals and grains restrictions issued in Hungary due to the Russian-Ukrainian war have also been criticized by the European Commission. Brussels is launching an infringement procedure against Hungary’s latest grain export requirements.

“The Commission considers the measure to be incompatible with EU rules on the common organisation of markets and on common rules for exports.” The decision to issue this statement was peculiar since the Commission previously stated that it would like to oversee the cereals market more closely.

According to the Commission, the Hungarian measure cannot be justified by the pursuit at national level of special economic objectives to be attained at Union level and, in any event, there is currently no need for any action pursuing security of supply of cereals within the EU.

War could supersede EU rules

It is no surprise that the European Commission launched procedures against the measures brought to handle these uncertain wartimes. In the past few months, Hungary has repeatedly received strong criticism regarding fueling policies as well as government supervision of grain exports – however so far it has not been necessary to implement these restrictions on cereal exports.

In reaction to the European Commission’s proceedings, Justice Minister Judit Varga reminded that in connection with the dual fuel pricing system, the Hungarian government had already noted that initially it was applicable to everyone.

However, the fueling-tourism that emerged due to inflation and the war threatened energy supply so severely, that the government withdrew this benefit from foreign drivers.

In regard to the grain export restrictions, the Hungarian government submitted their initial observations on this as well. Concerning both cases in the Luxembourg courts, we hope that common sense prevails and we will receive a favorable decision,

added Judit Varga.

According to the government’s previous position, the grain market measure is in line with the EU treaties which allow for significant export restrictions if public order, public safety, or public health are threatened.

In the current conditions, this would happen if panicked international buyers bought up all of Hungary’s grain. In this case there would be a food shortage.

Photo: Koszticsák Szilárd/MTI