The Issue of Regulated Gas Tariffs in Hungary

In this post we go around the politically charged topic of regulated end-user gas tariffs in Hungary, looking at the topic from three angles.

1) We attempt to shed some light on the real market price situation, coming to a conclusion that an open, competitive market pricing is a better option.

2) However, as energy poverty is a large problem in the country, some subsidies needs to be provided to the poor, so much so that we argue that for the ones in dire need, some quantity of gas free of charge could be a good idea, because it could drive people away from dirty fuels as well as serve as a good vehicle to reach out for these people with energy efficiency programs.

3) The strategic storage is financed solely by the business customers in Hungary, adding to their gas bill a total of EUR 55 million per year. This is hurting competitiveness. And we think that we could live without this storage as the risk of such a crisis is getting lowered with imminent EU regulation on the issue, less consumption, and more interconnectivity in the region. Hungary should scrap its strategic storage for good.

The full article is available in Hungarian. Please switch languages for access: