January gas price hike in Hungary becomes more likely

It is looking more likely that the consumer gas price will increase in Hungary in January, due to rising import prices, writes ingatlanmagazin.com, based on a report in daily Népszabadság.

The price of 1,000 cubic meters of gas imported to Hungary by Russian oil company Gazprom is over $300, which will increase to $340 in January, after which further hikes are expected. At the beginning of October, Ferenc J. Horváth, chairman of the Hungarian Energy Office (MEH), said that a January consumer price hike is not likely, because the import price had fallen back to $270 at the end of September.

The January import price increase to $340 is a result of a formula in a 1996 contract between Hungarian oil company Mol and Gazprom. However, that formula was based on a price of $70 valid nine years ago. This means that another import price hike can be expected in April.

Horváth said in October that only a dramatic rise in the price on the world market would result in higher gas tariffs for consumers, which would not be raised by much even then. Experts calculate that two-thirds of import expenses appear in the final price, which would mean a 5% to 10% consumer price hike in January.

This increase could be eased by the Hungarian forint strengthening compared to the American dollar.

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