Hungarian energy company prepared for transition away from Russian gas: consumers may face price increases

According to MVM, Hungary would be able to ensure gas supply in the future even if Russian gas imports were reduced. The company’s management believes that although security of supply can be maintained in the longer term, the transition will also be felt by consumers.

Hungary’s energy system relies heavily on Russian gas deliveries; therefore, the EU’s planned import ban by the end of 2027 may affect the country particularly sensitively.

Under the decision, restrictions may already apply to short-term pipeline gas contracts from June 2026, meaning that Hungary could be forced to restructure its procurement strategy within a relatively short period of time. The Hungarian government, however, has voiced strong criticism and announced that it will challenge the measure before the Court of Justice of the European Union.

MVM Group’s management nevertheless argues that the state-owned energy company will still be able to supply domestic consumers with natural gas even if Russian imports cease due to the regulatory changes announced by the EU.

Károly Mátrai, CEO of MVM, speaking to Reuters, emphasised that the decoupling would not be without consequences, and that consumers will certainly have to reckon with higher prices in the future.

New suppliers may replace Russian gas

Under the current system, Hungary consumes around 8 billion cubic metres of natural gas per year, purchased partly under a long-term Russian contract and partly on the regional spot market.

However, according to Mátrai, the European market is already capable of providing sufficient alternative volumes to replace the lost Russian gas. He stated that the company is negotiating with several suppliers, although no specific names have been made public.

In addition, MVM has already secured capacity at the Krk LNG terminal in Croatia, where it can book around one billion cubic metres of gas per year. Furthermore, it has concluded agreements with several international energy companies, including Shell and the French company Engie.

These contracts will make it possible to import a few hundred million cubic metres annually from 2026 onwards, covering a significant part of Hungarian demand.

However, the switch to alternative sources is not only a technical matter, but also an economic one. The CEO pointed out that deliveries from LNG terminals and the lengthening of transport routes may ultimately increase the price of gas.

What will happen to the long-term Russian contract?

Hungary currently imports around 3.5 billion cubic metres of gas from Russia each year. The fate of this volume has become uncertain, as EU regulations are also expected to apply to the long-term bilateral contract.

According to Mátrai, MVM is prepared for this possibility as well, and the necessary infrastructure is already in place to enable the country’s gas network to supply households and industrial consumers from multiple sources.

The company maintains that Hungary’s security of supply will not be at risk in the longer term, but increased utility bills will have to be taken into account in any case. Under the current, subsidised retail pricing system, rising international procurement costs will sooner or later have to be reflected in consumer prices.

Investments, power plants, nuclear energy

MVM is preparing not only on the procurement side, but also through power plant development. Three new gas-fired power stations with a combined capacity of 1,590 MW are currently being planned, and are expected to be commissioned in 2029.

In addition, the company intends to invest between 400 and 600 billion forints in extending the lifetime of Block 1 of the Paks Nuclear Power Plant, which would be extended by a further twenty years following its shutdown between 2032 and 2037.

The maintenance of nuclear and natural gas-based energy production clearly indicates that, during the transitional period, Hungary will continue to rely on fossil fuels, while increasingly emphasising diversification.

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