Hungary introduces new tax for oil and gas company MOL and adjusts another

The Hungarian government is introducing a new tax on oil and gas company MOL, based on the company’s revenue, while cutting the windfall tax it pays on profits from cheaper oil imported from Russia. This is set out in a decree published overnight by the government of Prime Minister Viktor Orbán.

MOL will now pay a tax of 2.8 percent on its net revenue for 2022. At the same time, the tax based on the difference between the price of Brent crude and Russian Urals crude, on which MOL currently pays a tax of 95 percent, will be reduced by $7.5 (163 Kč) per barrel.

The windfall tax imposed on MOL by the government last year took almost all the profits the company made from cheaper oil imported from Russia. The tax was part of a package of extraordinary taxes the government also introduced for banks, pharmaceutical manufacturers, insurers and airlines in an effort to reduce the huge budget deficit. Orbán needs to cut the deficit this year as well and avoid a recession, with inflation reaching 25.4 percent.