Orbán government pays millions of euros more to Russia for gas than it would have on stock exchange

Gas prices on the Dutch stock exchange have been falling for the ninth month in a row. However, Hungarian citizens are not affected by this positive change. How come? Hungarian residential gas tariffs have remained unchanged for a year. This is because Hungary pays for gas under a 15-year contract from October 2021: a contract signed by the Orbán government with Russia.

Russian gas more expensive than gas on Dutch stock exchange

Referring to the August data of the Hungarian Central Statistical Office (KSH), Népszava wrote that August seems to have brought some calm to the gas markets. At that time, Russia could charge Hungary around HUF 122 (EUR 0.32) per cubic metre of fuel. That meant a 3% increase compared to July. However, the benchmark average price on the Dutch stock exchange TTF, two months earlier, comes out at HUF 114 (EUR 0.30).

In August, the Russians could charge Hungary EUR 33.4 for every megawatt hour of gas. By contrast, the benchmark average price on the Dutch stock exchange in June was EUR 32.6.

Hungary paid EUR hundreds of millions more

In the meantime, MVM, Hungary’s leading power wholesaler, has started filling gas storage facilities. Thus, in one month, we received 687 million cubic metres of gas from Moscow, double the level of the same month last year. By August this year, we had received 3.6 billion cubic metres of Russian gas for a total of HUF 869 billion (EUR 2.3 billion). It is true that this is 16% less than in the first eight months of last year.

According to the calculation of Népszava, if Hungary had bought the fuel this year on the stock exchange instead of on the basis of the contract concluded by the Orbán government with the Russians (which will be in force for 15 years from October 2021), we would have paid HUF 337 billion (EUR 888 million) less by August 2023.

Russian gas supplies through Ukraine to be cut off

Ukraine’s Naftohaz will not extend its contract for the transit of Russian gas through Ukraine to the European Union, said the company’s CEO Oleksiy Chernyshov, in his interview with the Deutsche Welle Business News. The contract will expire at the end of 2024. The head of the company said that, until now, transport has only been reserved for countries that do not have a coastline.

Supporting Russia through the purchase of Russian gas during wartime is absurd. Natural gas and oil exports are among the main weapons in Russia’s war against Ukraine. Russia uses energy as a weapon. We believe that cheap gas comes with a high price,

the CEO said.

The decision will put the Hungarian, Slovakian, Czech and Austrian markets in a difficult situation, as currently around 42 million cubic metres of natural gas per day arrive via the routes through Ukraine, Index writes.

Read more about Hungary-Russia relations below:

• Why is today a National Mourning Day in Hungary, symbolised by Russian tanks?
• Macron supports Orbán: his meeting with Putin may become handy