The Hungarian government has scrapped its fuel price cap after a recent rise in demand and dwindling supplies. 

Many filling stations in the country's capital, Budapest, have run out of fuel in recent days, and there have been long queues at those that do have petrol.

For more than a year, owners of independent filling stations have called on Hungary's government to scrap the cap that set the price of petrol and diesel at 480 forints per liter, about $1.22— claiming that it was bad for business because they couldn't make a profit selling fuel for the same price as they bought it from state-owned oil company MOL.

Hungary first capped fuel prices more than a year ago. At the time, the government said the measure was necessary to shield consumers from some of the effects of inflation, now at a two-decade high of 21 percent.

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Prime Minister Viktor Orban initially said the cap would only be in place for three months. But as the conflict in Ukraine dragged on, it was renewed again and again.  

Just four weeks ago, Orban publicly insisted that the cap was a necessary tool to help bring down the inflationary rate to single digits by next year.

Fuel consumption in Hungary rose this year by 25 percent compared to last year. On top of that, there were maintenance issues at one of MOL's oil refineries and foreign companies cut fuel shipments to Hungary after the cap was introduced, all of which created a perfect storm that led to fuel shortages and long lines at filling stations.

Now that the government has abolished the cap, prices will be set according to the market rates of 640 forints or $1.64 per liter of petrol and 699 forints or $1.99 per liter of diesel. 

Still, many gas stations are running empty, and it's unclear when they'll receive fresh supplies.