Hungary pays much more for Russian gas than for gas from elsewhere

January was the fourth month in a row in which Hungary received the most expensive Russian gas among the EU countries. At the end of 2022, there was a month when the average price of Russian imported gas was more than double the average price of gas imported from other countries, G7 reports.

Much more expensive Russian gas

Within Hungarian imports, Russian natural gas is visibly more expensive than gas from other sources, the G7 article says. At the end of last year, there was a month when the average price of Russian gas imports was more than double the average price of gas imported from other countries. In October and November, Russian gas arrived in Hungary at an average price of more than HUF 1,000/cubic metre (EUR 2.65), while imports from other sources were around HUF 500 (EUR 1.33).

The discrepancy can be explained mainly by differences in procurement contracts, G7 writes. Russian gas purchases are largely attributable to Hungarian state actors. Thus, the average import price is also determined by the contracts of these actors. The biggest buyer is the state energy giant MVM. It buys 4.5 billion cubic metres of gas a year from Gazprom.

In their contract, the purchase price follows the stock exchange listing, with a two-month lag. This partly explains the price difference between Russian and other imported energy sources. The gas imported from other sources does not seem to be priced in such a shifted way, but more often at the current exchange price.