Hungary to subsidise diesel car owners, rules out fuel price cap

Hungary will provide a targeted subsidy to households running diesel-powered cars rather than impose a cap on fuel prices, Prime Minister Peter Magyar said on Friday, citing the risk that a ceiling could trigger supply shortages.

In a Facebook post, Magyar said Europe was facing an unprecedented diesel shortage. His government would offer "direct and effective support" to the owners of one million diesel vehicles and their families, he said.

Under the plan, owners of diesel cars with a maximum output of 150 horsepower will receive a total of 20,000 forints, equivalent to about $63.96, by December. Farmers will receive separate assistance through excise tax refunds.

Global diesel markets have tightened sharply in recent weeks. Industry executives have warned that supply will remain squeezed through the winter because of limited spare refining capacity, Russia's export ban and approaching peak heating demand.

Russia, normally the world's second-largest diesel exporter after the United States, extended its export ban through September 30. Middle Eastern supplies have been constrained by the Iran war and reduced shipping through the Strait of Hormuz.

Domestic pressure has added to the strain. Hungarian oil group MOL's main Danube refinery has operated at reduced capacity since a fire damaged one of its crude units in October 2025.