Russian gas purchases by Hungary still staggeringly high compared to other EU countries

Russian gas continues to flow into Hungary, with an estimated 2.6 billion cubic metres arriving so far this year, which is 59 percent more than last year’s volume.

According to Népszava’s calculations based on Eurostat data, the price of Russian gas rose again in April to over 7 percent of the market price. After charging HUF 110 (EUR 0.28) per cubic metre, Russia sold Hungary the fuel at HUF 101 in April, 8 percent cheaper. However, the reference price on the Dutch stock market, TFF, two months earlier was HUF 108 (EUR 0.27), a 13 percent drop from February, with an EU average of HUF 94 (EUR 0.24). A price increase of around 7 percent is considered average.

So far this year, 2.6 billion cubic meters of Russian gas have been delivered to Hungary, 59 percent more than last year, when the total of 6.7 billion cubic meters also far exceeded the 4.5 billion cubic meters per year set in the new long-term Hungarian-Russian gas contract signed at the end of 2021. Other EU member states have already switched to other, more reliable suppliers.

A distinction needs to be made between gas coming through pipelines from Russia and the alternative used by other countries, liquefied natural gas (LNG), although Russia has recently started producing LNG too. Countries like the Czech Republic, which also has no coastline like Hungary, do not buy Russian gas, while in Austria, the Austro-Russian gas contract until 2040 is under discussion as well.

In April, the 14 countries reporting to Eurostat bought a total of 4 billion cubic metres of Russian gas, either piped or liquefied. Belgium, for the first time in almost two years, bought 116 million cubic metres by pipeline in addition to the LNG. Although the Hungarian data is the 4th highest of 15 pipeline and LNG transactions, after France, Italy and Spain, it is by far the highest in terms of population. The average gas tariff of Hungary, unlike in previous years, was in the middle of the range, similar to March, Népszava reports.

Is all the Russian gas bought being used in Hungary?

While domestic demand is falling, and market prices, including Russian prices, have been more or less stable for a year and a half, the Hungarian Ministry of Energy recently announced that the level of domestic storage is already over 75 percent full. So it is not impossible that some of the quantity bought will eventually be sold.

Although Hungary lost HUF 4 billion in April compared to the stock market purchase, and HUF 234 billion (EUR 593 million) since October 2021, this year’s total is close to zero, showing that prices are levelling out. Compared to April’s stock market prices, as prices have risen since then, the country gained HUF 3 billion (EUR 7.3 million) this time. However, based on this calculation the loss was HUF 305 billion (EUR 773 million) since October 2021 altogether.

As we previously reported, current court cases against Gazprom in the EU could result in several countries, including Hungary, being cut off from Russian gas. This could lead to the cessation of gas deliveries from the Russian company to the Hungarian state gas provider, as Gazprom would not have access to the payments initiated by the Hungarian gas provider, MVM. Arbitration courts have previously ruled against Gazprom in various European cases due to halted gas deliveries in 2022.

Read also:

• FM Szijjártó in Russia: No one has the moral right to put pressure on us to cut our relationships – Read here
• Hungary’s government rejects pressure on energy policy

Featured image: depositphotos.com

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