The Hungarian government won a major concession from the European Union on Monday, securing a near-total exemption from the bloc’s ban of Russian oil imports.
The exception will help the populist government of Prime Minister Viktor Orban keep prices at Hungarian gas pumps in check – but only for Hungarians.
Starting last Friday, the government introduced a system of dual pricing at gas stations across the country. While the price of petrol is now capped at HUF 480/liter ($1.30 per liter or $4.92 per gallon) for Hungarians, foreign drivers filling up in Hungary are now paying a lot more.
The Hungarian government first imposed price restrictions on fuel and some basic food items in November, in an attempt to soften the impact of rapidly rising prices on voters ahead of a key general election in April.
Blaming “petrol tourism” for the move, the government announced Friday that the lower price will only be available to vehicles with Hungarian license plates.
Prices at pumps in neighboring EU countries have been significantly higher for months, and drivers in some border regions have been taking advantage of the Hungarian policy. Last week, prices were hovering around 1.80 euros ($1.93) per liter in Slovakia, Croatia and Austria, and around 1.60 euros ($1.70) in Romania and Slovenia, according to the European Commission.
Gergely Gulyás, who heads the Hungarian prime minister’s office, said in a news conference last week that the fuel freeze “ensures the best prices in Europe.”
“But due to a high level of abuse, starting [Friday], only cars with Hungarian registration plates will be allowed to fill up at gas stations with the reduced price,” he said.
The leaders of the European Council announced on Monday that the European Union had agreed to ban 90% of Russian oil imports by the end of the year as part of a package of sanctions against Moscow over its unprovoked assault on Ukraine.
Orban has refused to support a Russian oil and gas ban, calling the EU “irresponsible” for putting the economies of its members at risk.
Rather than risk Orban vetoing the whole package of sanctions, the EU agreed an exemption would be made for the southern segment of the Druzhba pipeline. The northern segment of the pipeline serves Poland and Germany, which have agreed to the embargo. The southern part goes to Hungary, Slovakia and Czech Republic.
CNN’s Boglarka Kosztolanyi contributed reporting to this post.