Gas crisis: 1.5 million people in Hungary might face insoluble problems due to a bad decision

Currently, 1.5 million people are living in multi-apartment buildings supplied by district heating or common central heating. Gergely Gulyás, the prime minister’s chief of staff, said the government’s July revision of the utility price caps does not apply to them. However, the company determining gas prices published its latest data this week. Based on that, the worsening situation will likely give headaches to some residents.

HEA determined a very high reference gas price

According to atlatszo.hu, government-close sources told them that the government’s utility price cap scheme may have ended in apartments supplied by district heating or common central heating. The prime minister’s chief of staff, Gergely Gulyás, talked about the opposite in July. But the gas price was “only” 182 EUR/MWh then.

The Magyar Energetikai és Közmű-szabályozási Hivatal (MEKH, in English: Hungarian Energy and Public Utility Regulatory Authority, HEA) determines each May the reference price of gas billed by the service providers. However, this year they decided to extend that period until 26 August. They expected the prices to decrease during the summer.

However, the opposite happened. The prices continued to increase, so the HEA determined gas prices at 300 EUR/MWh this week. That is a tenfold rise compared to the 2021 figures. It means the company would have a 120 billion HUF revenue and a 962 billion HUF expenditure this year if the government’s utility price cap scheme remains in all apartments with common heating. That is an unbearable balance.

Read also: Decorative lighting in Budapest will be switched off earlier to save energy

Will many people be excluded from the government’s utility price scheme?

A source of Átlátszó said that the government would increase the price of gas in apartments with central heating. Furthermore, it will terminate its utility price cap scheme for many consumers.

The HEA did not answer the questions from the Átlátszó. According to their website, the HEA is the regulatory body of the energy and public utility market, supervising the national economy’s sectors of strategic importance.

Read also: The EU criticises the new Hungarian-Russian gas deal

Minister: maintaining economic growth is Hungary’s most important goal

The most important goal for Hungary is to maintain its economic growth even in the midst of a recession hitting both Europe and the world, the prime minister’s chief of staff said, addressing a ceremony of electric component manufacturing company OBO Bettermann in Bugyi, a southern settlement, on Friday.

It is important to underline that the investor-friendly economic environment that has prevailed in Hungary in the last several years will be maintained, Gergely Gulyás said. He noted that the OBO Bettermann group has decided to expand its operation in Bugyi with the introduction of new surface treatment technology and to also expand its logistics capacity in the town.

The 18 billion forint (EUR 45m) investment will create 100 jobs, he said, adding that the Hungarian government will support the project with a 3 billion forint grant.