End of friendship? Russian gas will be much more expensive for Hungary

Russia will increase gas prices this fall significantly. That is probably why the Hungarian government needed to change its gas price cap scheme. Based on news outlets, the increase in Russian gas prices will be nine or even tenfold. The last time the Eurasian great power raised its gas prices was in May. In the last few weeks it has become certain that they would do so again in autumn. Further details are below.

Russian export decrease, forint weakening

Based on Eurostat data, in May, Hungary imported one m³ of gas for an average of 123 Eurocents, which was 475 forints then. That was a historic peak, but the situation worsened due to the weakening of the forint.

Thanks to a contract with Russia, the Hungarian MVM group purchases gas for a lower price. However, the difference is not significant – g7.hu wrote. They are the biggest Hungarian buyers, so they affect the market most.

In June, gas prices rose again because the Russians decreased their import volume, and the forint lost value. That is why the government decided to modify gas price cap scheme in Hungary. They calculated that the gas price would be so high by September that the utility price cap scheme would become unsustainable. The second Orbán cabinet introduced it after their 2010 landslide victory. Maintaining it was one of their promises in the 2022 general elections. 

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Gas prices will skyrocket by fall

G7 made some calculations based on the changes in the stock market prices. They estimated that gas prices will continue to rise in the international markets until early autumn. One m³ of Russian gas will cost more than 600 HUF (150 Eurocents) in September.