Gas prices set to rise sharply in summer

Hungarian households can expect their gas bills to rise significantly after July, as the government reduces subsidies. Changes in tariffs must be announced one month prior to the July 1 deadline.

The gas compensation scheme is currently an issue at coalition talks, Népszabadság reports. The government is under pressure to introduce changes to bring down the budget deficit. The current gas compensation mechanism was introduced by former prime minister Péter Medgyessy.

Household consumers with annual consumption below 1,500/mł are currently entitled to a Ft 22/mł subsidy. Finance Minister János Veres said the government intends to significantly reduce the number of consumers eligible for retail gas subsidies after July, but as yet there has been no agreement between the two coalition parties.

The government must act fast on this issue, as certain industry analysts say the compensation fund will be dwindling by the summer. Funding comes from MOL's revenue from mining commissions, totalling some Ft 100 billion this year. Gas importers are calling for significantly higher rates, as variations in gas prices follow those of crude oil, so rising oil prices should accordingly be reflected by gas tariffs.

Industrial users bore the brunt of recent gas price increases, as tariffs in that sector have gone up 40% since August, substantially higher than domestic charges.

The above story is just one of more than two dozen published today by Hungary Around the Clock, the most comprehensive source of daily English-language news about Hungary. For a free trial of HATC, click here. Hungarian news sources include Népszabadság; Magyar Hírlap; Világgazdaság; Napi Gazdaság; Magyar Nemzet; Népszava; Kossuth Rádió news and Hungarian television's nightly news broadcast.

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