Hungary's government has said it will limit the price of petrol and diesel amid soaring fuel prices.

The price cap will be in place for three months and will then be reviewed, government minister Gergely Gulyas told reporters on Thursday.

"[This] will support the economy and contribute to a reduction in inflation," Gulyas said.

Fueling stations that charge more than the established cap could be shut down, he added.

The decision came as fuel prices have climbed to near-record levels in Europe, pushed by inflation, dramatic crude oil prices, and increasing demand.

Average prices for petrol and diesel are more than 50% higher per litre in Hungary than this time last year, rising above the symbolic mark of 500 Hungarian forints (€1.37) per litre.

But a new cap of 480 forints (€1.32) per litre of fuel will go into effect nationwide on Monday.

The decision to cap fuel prices also came amid other financial woes in Hungary that could play a role in April's national elections.

Inflation reached 6.5% in October, its highest level since 2012 in Hungary, according to the Central Statistical Office.