The Hungarian government seeks to raise more than $2 billion from its windfall tax mainly targeting banking and energy sectors in a bid to curb the effects of price increases stemming from the Russian invasion of Ukraine, hitting Budapest stocks and rattling investors in the meantime.

Budapest is looking to levy revenue of 300 billion forints ($820 million) each from both the banking and energy sectors, Economic Development Minister Marton Nagy told a press conference on Thursday.

Energy giant MOL bears the brunt of the burden. Nagy said MOL was making big profits by using cheaper Russian Urals crude at its refineries.

Nagy's comments on MOL come as Hungary continues to push back on European Union plans for an embargo on Russian oil, demanding energy investment before it agrees to a ban.

A further 200 billion forints will be raised in total from retail chains, insurance firms, airlines, telecommunications and pharmaceutical companies, said Nagy.

"It is not the profit but the extra profit that is being taken away," he told reporters.

A tax on advertising revenues will also be introduced towards bringing in 15 billion forints of revenue, Nagy added.

The taxes – to bring in a total of more than 800 billion forints – are to be imposed in both 2022 and 2023, said Nagy, declining to say if they would be extended beyond that period.

Some 60% of the deficit adjustment will come from spending cuts at ministries and by postponing some public investments, Nagy, a former central bank deputy governor, said.

Prime Minister Viktor Orban announced the windfall taxes on Wednesday, justifying them by saying that the war in neighboring Ukraine and "sanctions policy in Brussels" had led to "rising prices."

Together with high interest rates, higher prices "are giving banks and large multinationals extra profit," he said.

That announcement came a day after Orban imposed a state of emergency, citing the threat of a humanitarian disaster and economic challenges posed by the war.

The money raised will go to two funds, one to strengthen the army and the other to fund price caps on energy and water bills, Orban said.

Companies making extra profit will thus help the Hungarian economy and contribute to the country's defense costs, his chief of staff, Gergely Gulyas, said on Thursday.

Orban also needs to raise revenues to bolster government finances after his pre-election spending spree and caps on energy bills, which helped him win a landslide victory last month.

The plan is reminiscent of Orban's tax regime used to fix the budget after he swept to power in 2010. The taxes aim to reduce the budget deficit this year and next, targeting a reduction in the budget shortfall to 3.5% of GDP in 2023.

Hungary's blue-chip stocks slumped, led by oil and gas group MOL and OTP. MOL fell nearly 7%, OTP fell nearly 3% and Magyar Telekom stocks dropped almost 5% as of 1:30 p.m. GMT.

In another move intended to curb so-called "fuel tourism," the government also announced on Thursday that only cars with Hungarian registration plates will be able to fill up at Hungarian petrol stations, where prices have been capped since November.

"Foreign buyers are exploiting the fact that Hungary is able to maintain petrol prices at 480 forints (1.2 euros, $1.3 per litre), while they are at 700 to 900 forints elsewhere in Europe," Gulyas told the same press conference.

"Cars with foreign number plates will have to pay market prices," he said.