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EconomyHungarian gas stations sued the government at the European Court of Human...

Hungarian gas stations sued the government at the European Court of Human Rights

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Group petition of 50 gas stations lodged with the European Court of Human Rights (Strasbourg) in response to the Hungarian Government’s illegal capping of petrol prices

The Hungarian Government capped the price of petrol and gasoline at a price of HUF 480 (~ 1.2 EUR) in mid-November 2021. Since then, the cap has been extended until November 2022 without any consultation with stakeholders. The price cap is barely half of the actual free-market price.

Consequently, the gas stations suffer serious financial damage every day now by selling fuel. However, they cannot stop or suspend their activity since the Hungarian Government enacted a decree that forces the gas stations to operate at all costs.

In this situation, 50 gas stations submitted a joint constitutional complaint with the Constitutional Court of Hungary and now lodged their case in Strasbourg. The gas station owners are represented by Dániel Karsai, an attorney-at-law based in Budapest with a human rights portfolio.

The Strasbourg Court has already ruled in favour of analogue applications where the profit margin was cut down to practically zero, finding that such a piece of legislation is contrary to the right to property. The gas stations are of the view that their case shall have a similar outcome, for the following reasons.

In the gas stations’ view, it can be reasonably argued that the Hungarian government misused its legislative power delegated to it by the Fundamental Law of Hungary. The Government framed the price-capping using the emergency situation of COVID-19 and the war in Ukraine. These emergency situations enable the Government to pass emergency decrees without effective parliamentary control.

Moreover, the Government disregarded even the domestic law which provides that for any price cap introduced the Government must provide the means of sufficient profitability for the affected enterprises. It shall be underlined that gas stations were forced to comply overnight with the change of legislation. Non-compliance could result in an administrative fine of 15.500 EUR to 38.500 EUR.

The most extreme form of interference in the applicants’ proprietary rights is the obligation to hand over the operations of their gas station to another registered competitor without any compensation. The de facto expropriation can take place as a form of punishment for non-compliance with the emergency decrees of the Government.

With no safeguards provided for the affected persons to regain control of their lost businesses, and with no terms prescribed to compensate them for their de facto expropriated land and business, the Hungarian legislation is in serious contradiction with the right to property.

“We expect the ECtHR to look beyond appearances; to find that the Hungarian legislation deprived the applicants of making full use of their business licences and that it resulted in the unprecedented loss of their professional clientele, some of them left by the Government on the edge of bankruptcy” – says Mr Karsai.

“We believe, that in light of the severity of the Government’s restrictions, the case of Hungarian gas station owners will be processed with priority and will be a landmark case leading to Hungary’s violation of the Convention.”

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