Hungary to give targeted subsidy to owners of diesel-powered cars

BUDAPEST, Sept 11 (Reuters) - Hungary's government will give a targeted subsidy to compensate households using diesel-powered cars as fuel prices have risen but will not introduce a price cap as that could trigger supply shortages, Prime Minister Peter Magyar said on Friday.

Magyar said in a Facebook post that there was an unprecedented diesel shortage in Europe.

Global diesel markets have tightened sharply in recent weeks, with industry executives warning that supply would stay squeezed through winter due to limited spare refining capacity, Russia's export ban and approaching peak heating demand.

Magyar said his government would "provide direct and effective support to the owners of one million diesel-powered vehicles and their families."

"By December, owners of diesel-powered vehicles with a maximum of 150 horsepower will receive a total of 20,000 forints ($63.96) in compensation," he said, adding that farmers will also receive help in the form of excise tax refunds.

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

Compounding the pressure at home, 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.

($1 = 312.7000 forints)

(Reporting by Krisztina Than, Editing by Louise Heavens)