Gap in the market: Utility costs may change in Hungary

Hungary had to start using its stored natural gas, while suppliers struggled to find storage. Recently natural gas imports fell to their lowest since April and the level of natural gas in storage significantly decreased. This happened during an abundance of natural gas supplies in the European markets. This could have meant enormous profits for the country considering the amount of storage capacity left.

Since Monday natural gas transports halted from the direction of Austria due to scheduled maintenance. This means that a third of natural gas supplies were cut off. At the same time, Russian imports decreased significantly. The combined interruption means that only about half of the usual amount of supplies have arrived in Hungary, reports G7.hu. Due to the missing amount, it is no wonder that the storage facilities had to be used.

An abundance of natural gas

In the past month, natural gas supplies kept arriving in Europe, while most storages were already filled to the brim. Because of the unusually hot weather, consumption was not as high as expected so the demand for natural gas dropped. Therefore, the price of natural gas dropped to almost all-time lows. Because of the war, the supplies became uncertain. Usually, the spot and forward price of natural gas is almost equal, due to the recent abundant supplies the spot price dropped.

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This gave an opportunity for those countries that could store more natural gas to stock up and then sell it later for increased prices. The difference between the price per cubic metre of natural gas spot price and the forward price was about 0.75 euros. Hungary could have stored roughly 45 million cubic metres a day. If it all would have been used, it could have meant about 3.2 million euros in profits according to G7.hu.