Hungary tightens limit on road fuel purchases: Update
Adds details on OMV retal stations in paragraph 4
Hungarian integrated oil firm Mol is halving the amount of road fuel that passenger cars can buy from its domestic retail stations to 50 litres per purchase, down from a previous limit of 100l.
The cut partly reflects the fact that Hungarian road fuel demand remains above average as a result of the government's cap on pump prices.
"The limit was determined based on the quantity that is sufficient for retail users and that exceeds the volume of typical average refuelling," Mol told Argus. The company aims "to ensure that all customers are served and that filling stations operate smoothly". Buyers filling up fuel cans are no longer eligible for capped prices, Mol added.
Austria's OMV has also put a 50l limit on purchases of most road fuels at its retail service stations in Hungary from today. OMV operates nearly 200 filling stations in Hungary and has a 15pc share of the local retail market.
Budapest first introduced a temporary price cap on 95 Ron gasoline and regular diesel at 480 forint/l ($1.27/l) in November to help shelter motorists from rising fuel costs. The price cap has since been extended several times, most recently until 1 October this year, underpinning a significant increase in Hungarian road fuel demand, especially from international freight forwarders and foreign drivers.
The government approved modifications to the policy in early March banning trucks above certain weight limits from buying fuel at capped prices. And since late May, the subsidised prices have been available only to vehicles with domestic registration plates.
But these measures "couldn't really" reduce the 20pc demand growth generated by the price cap, the Hungarian Petroleum Association (HPA) told Argus. Consumption of motor fuels usually peaks in July-August, and this peak may be higher this year, it said.
"We have risks on the supply side, the whole of Europe and our region are short on fuels," the HPA said, pointing to a significant reduction in capacity at Austria's 193,700 b/d Schwechat refinery because of a mechanical incident and temporary problems caused by a small fire at Mol's 161,000 b/d Szazhalombatta refinery in Hungary.
Schwechat is expected to resume full operations in the second half of August or September, operator OMV said today. Meanwhile, Mol has confirmed that Szazhalombatta's crude unit is back online after the fire on 14 June. The firm is planning to carry out an overhaul at Szazhalombatta in August, postponed from April, which may constrain supply later this summer.
Related news posts
Kuwait’s KPC agrees VLSFO term supply contract with QE
Kuwait’s KPC agrees VLSFO term supply contract with QE
Singapore, 23 April (Argus) — Kuwait's KPC hassigned a term agreement with fellow state-owned firm Qatar Energy (QE) to supply very-low sulphur fuel oil (VLSFO) for loading over July 2024 through to June 2025. The VLSFO supplied amounts to 1.2mn t/yr (21,000 b/d). KPC finalised the term contract at around a $8-9/t premium against the average of Singapore 0.5pc marine fuel spot assessments, according to a source close to the company. QE has expanded its own bunkering infrastructure at the port of Ras Laffan and started relying on VLSFO supplied from Kuwait's 615,000 b/d al-Zour refinery since early last year. The VLSFO supplied is mainly to meet the country's bunkering and power generation demand. QE had a previous mini term VLSFO agreement with KPC last year. KPC supplied around 1-2 Medium Range size vessels of VLSFO each month from January 2023 to March this year, according to global trade analytics platform Kpler. The announcement of the term deal left the market unfazed, said a Dubai based fuel oil trader, as KPC has regularly offered term tenders over the year. Supplies to QE has been continuing since last year, with the deal merely being a renewal of their previous agreement, the trader added. This is KPC's third official term contract concluded since the start-up of al-Zour in late 2022. The first term contract was awarded for second-half 2023 loading to Shell, with the second to ExxonMobil for first-half 2024 loading. The terms of the two contracts stated a minimum of 80,000 t/month and a maximum of 720,000 t/month of VLSFO, with KPC having discretion over the total volume. Al-Zour can produce around 11mn-12mn t/yr of VLSFO at full capacity, with around half of it allocated for exports. By Asill Bardh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil 1Q tallow exports triple on long-term contracts
Brazil 1Q tallow exports triple on long-term contracts
Sao Paulo, 22 April (Argus) — Brazilian beef tallow exports totaled 73,930 metric tonnes (t) in the first quarter, a three-fold increase from the same three-month period in 2023 on rising demand. Almost 93pc of outflows between January and March were shipped to the US, according to data from Brazil's trade ministry. Long-term contracts explain the rising flow of exports, even though spot market arbitrage was closed throughout the first quarter (see chart) . The price of tallow in the Paranagua and Santos ports was $960/t fob on 19 April, keeping the arbitrage closed to US Gulf coast buyers, where the reference product was at $901/t on a delivered inland basis. Brazilian tallow is also negotiated at a premium against soybean oil, which closed at $882/t fob Paranagua on 19 April. This scenario has been observed since the 1 December 2023 start of Argus ' tallow export price assessment. Historically, vegetable oil in Brazil was traded at a discount to tallow, but strong demand has boosted the price of animal fat. Some biodiesel plants have been purchasing used cooking oil (UCO) or pork fat as an alternative. In 2023, there were doubts about whether the outflow of tallow from Brazil would be constant. Market participants now believe that the 2024 start of operations at new renewable diesel refineries in the US should sustain exports. Local suppliers that have already signed supply guarantee contracts — some up to three years — with American buyers are also considering export opportunities with Asia, including a new renewable diesel plant in Singapore that could receive Brazilian cargoes. Expansion projects are propelling US demand, including work that would bring capacity at Marathon Petroleum's Martinez Renewables plants in California to 2.35mn m³/y (40,750 b/d)and the Phillips 66 Rodeo unit in northern Californiato 3mn m³/y. These and other new projects will increase annual US demand for tallow by 5mn t. Maintenance on the horizon Maintenance at US refineries has Brazilian sellers bracing for a short-term drop in prices. Between May and June the Diamond Green Diesel (DGD) unit in Port Arthur, Texas, will shut down for maintenance, a stoppage that could impact demand for Brazilian inputs. Market participants have already observed a slight increase in domestic tallow supply, a change they attribute to maintenance at DGD. The advance of the soybean crop in Argentina is also expected to increase the supply of feedstocks to North American plants, as some refineries are returning to soybean oil after a hiatus of several years. The soybean oil quote on the Chicago Board of Trade (CBOT) is an important reference for the price of tallow. By Alexandre Melo Renewable feedstocks in Brazil on fob basis R/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Colombia's electricity woes add to unrest against Petro
Colombia's electricity woes add to unrest against Petro
Bogota, 22 April (Argus) — Colombians took the streets of major cities and towns across the nation on Sunday to protest mainly against health, pension and labor changes, but potential power outages are also creating discontent. Authorities estimated that about 250,000 Colombians marched in widespread protests, sparked by changes in healthcare. Congress in April had rejected President Gustavo Petro's proposals in the sector, and the government the next day seized the two largest private-sector health insurers. Protesting healthcare workers say the government did this to implement changes through a back channel. "Regulatory noise and risk are likely to remain high amid announcements, proposals, and measures [that do not require congressional approval], aimed at changing the game's rules in strategic sectors," brokerage Credicorp Capital said. Colombians also protested being on the verge of electricity rationing like that in neighboring Ecuador as hydroelectric reservoirs remain at record-low levels. Several unions and other associations have long warned the Petro administration to take measures to offset the effects of the El Nino weather phenomenon. Electricity distributors last year called for allowing bills for energy purchased on the spot market to be deferred and for loosening price index rules, among other proposals. The national business council sent at least three letters to the president on the issue. At least nine separate letters calling for preparation to prevent blackouts were sent to the president and ministers. Several actions were only recently implemented . "There are no risk of electricity rationing in Colombia," former energy minister Irene Velez said in 2023. "We do not understand why some people are interested in generating panic." Government weather forecasts also overestimated rainfall expected for March, leading hydroelectric plants to use more water in the reservoirs than they otherwise would have, said director of the thermoelectric generation association (Andeg) Alejandro Castaneda. Reservoir levels stood at 29.5pc today, rising thanks to rains since 19 April, up from 28.75pc on 18 April. Electricity rationing is set to begin when reservoirs drop below 27pc, according to grid operator XM. By Diana Delgado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
German products demand up on supply concerns
German products demand up on supply concerns
Hamburg, 22 April (Argus) — German demand for heating oil and fuels rose sharply in the past week, with consumer concerns that conflict in the Middle East could restrict product availability were coupled with falling domestic product prices. Spot trade of heating oil, diesel and E5 gasoline submitted to Argus reached their highest weekly averages since the start of the year. The last time this amount of heating oil was traded was in December last year, and for gasoline and diesel it was at the beginning of October. Gasoline demand surged particularly in the Emsland and South regions, and middle distillates were primarily traded in Rhine-Main and Southwest. The missile attack by Iran on Israel on 13 April and Israel's drone attack on Iran on 19 April have heightened concerns of further escalation. An open conflict between Iran and Israel could affect supply of crude and gasoil from the Middle East by threatening major shipping routes of the Suez Canal, the strait of Hormuz and the eastern Mediterranean. These concerns led some German consumers to fill their tanks. Concurrently, product prices have fallen across Germany, further stimulating demand. Refineries in Karlsruhe and Neustadt-Vohburg have drawn buyers with fuel oil and gasoline prices below the German average. Heating oil at Miro's 310,000 b/d Karlsruhe traded at more than €2/100l below the national average, while gasoline at Bayernoil's 216,000 b/d Neustadt-Vohburg traded at a discount of almost €6/100l to the same average. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more