Hungarian gas prices five times the market value

Hungarians pay multiple times the market price for gas. At the current rate, the European gas market is at quite a low level, especially compared to the Hungarian gas prices.

The portion above the reduced amount in Hungary is now paid five times more by the people than the actual market price of gas. This is because the price has dropped to almost EUR 30 per megawatt-hour in Europe, similar to the level before the Russian-Ukranian war. There is an anticipated consistently low market price throughout the year, which would give the government ample room to reduce prices.

Surprising statistics

The government argues that restricting the reduction in utility bills won’t negatively affect families. Their argument stands on their estimation that 9 out of 10 households currently pay no more for gas than before. One individual interviewed by RTL said they avoid going over the average consumption by dressing warmer indoors and lowering the heating.

Due to colder weather, households used 5,4% more gas in the past three months compared to a year ago. However, the Energy Office data shows that even considering this statistic, there is a 38% decline compared to consumption two years ago.

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Effects of the war

For the past year and a half, the government has only provided utility bill reductions up to the average consumption. They attribute this limitation to the Russian-Ukrainian war and the so-called misguided sanctions against Russia. Liquefied gas is flowing into the EU in greater measures than ever before. Before the war, there was an average consumption of 40% between the Member States; now it has gone down to a meager 7%.

Seeing all this data compiled, Hungarians are paying five times more for the portion of gas beyond the reduced amount than the market price in the EU. The Europe-wide average market price is EUR 30 per megawatt-hour, which is a considerable drop seeing the before-war levels of gas prices. This low market price has granted the government a considerable room for price reductions.

Current situation

The Hungarian gas price has been fixed by the government since 1 August 2022. This means that, because the market dropped down to a sheer EUR 30 from the dizzying 300-340 range, the government now has plenty of room to adjust tariffs.

According to RTL, the government’s budget had an energy protection fund that had HUF 520 billion (EUR 1.34 billion) by the end of the year. This was considerable due to the plummeting gas prices. This amount is roughly the estimate of the 13th month pension payout this year that the Finance Minister of Hungary has estimated.

In response to inquiries, the government had nothing more to add to the issue, other than their official response which sounds like this: “Thanks to the utility bill reductions, the Hungarian households have the most affordable access to electricity and gas in Europe”.