What’s the truth? Russia sells gas to Hungary extremely expensively

The Hungarian government of Viktor Orbán bought gas from Putin at a higher price in June, paying HUF 2 billion (EUR ~5 million) more than the stock market price. And this is not the first time this has happened.

Just a month ago, we reported that Hungary could have bought gas one-and-a-half times cheaper on the Dutch exchange in May than from Russia. In the month of June, the same happened: the Orbán government paid HUF 2 billion more to Russia for gas than it would have, had it bought gas on the stock exchange, reports Népszava.

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Gas from Russia vs on the stock exchange

In June, Hungary paid an average of EUR 1069 (HUF 430,000) to Russia for a thousand cubic metres of natural gas. But the average price of Russian gas two months ago was EUR 992 (HUF 390,000), according to the Dutch gas exchange TTF.  According to the KSH database, Hungary paid a total of HUF 158 billion (EUR 393 million) for Russian gas in June. But if the government had bought Russian gas on the stock exchange, it would have cost HUF 2 billion less.

Why is this surcharge a serious problem?

There are several reasons why this surcharge is infuriating. One is that Vladimir Putin said in February that Hungary would get gas from them at a fifth of the stock market price. The second reason is that Viktor Orbán and Péter Szijjártó seem to have called the Hungarian-Russian gas purchase agreement the ‘guarantee of the overhead cuts’ without any basis.

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A third reason is that the Russian threats have already sent European gas markets skyrocketing, threatening a general economic downturn across the region, Népszava continues. This means that, while the Orbán cabinet is standing up for Vladimir Putin with a long-term treaty, and taking a stand against the EU, we could get even cheaper gas from the free market.

According to Népszava’s calculations based on KSH data, in June this year, Hungary paid the Russians an average of EUR 1,069 for a thousand cubic metres of natural gas. This is 7.8 percent higher than the average price of EUR 992 in April two months earlier, which is also the benchmark for our Russian gas tariff on the Dutch gas exchange TTF.

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Source: Népszava, 168.hu