Hungary to Walk Separate Road from EU in Energy Matters

Energy procurement and security is yet another matter where the Hungarian government and Brussels are taking diverging paths. Budapest has firmly rejected proposals for a mandatory joint EU gas procurement and a solidarity mechanism at the Energy Council in Luxembourg this week and the Cabinet of Prime Minister Viktor Orbán is dead set against a possible gas embargo on Russia.

The range of issues over which Budapest and Brussels disagree is rather large. Energy is yet another area where Hungary and the European Union see matters differently. While the bloc is keen on including energy sanctions against Russia into its policy mix, Hungary is opposed to most of these measures and is prepared to take the lonely road.

No to “crazy ideas”
The Hungarian government has voiced its opposition to the EU’s plan of setting up a common gas procurement platform. According to Prime Minister Viktor Orbán, the long-term solution to Europe’s energy crisis is for countries to procure energy from as many sources and directions as possible.
Foreign Minister Péter Szijjártó said earlier this week that the European Commission “has not learned from its past mistakes and does not want to face reality” when it comes to energy matters. Speaking after a meeting of EU energy ministers in Luxembourg, Szijjártó stressed that the measures taken by Brussels have so far only exacerbated the energy crisis.”
This is in line with the Hungarian government’s ongoing political campaign, which blames the sanctions introduced by Brussels against Russia as the root cause for the country’s economic ailments.
According to Szijjártó, at the meeting “some quite crazy ideas were put forward,” with one participant suggesting, for example, that a bottom price cap should be introduced alongside the top one, to prevent the low gas price from jeopardizing energy-saving efforts.
Budapest is of the opinion that a common EU gas procurement platform can only be set up on a voluntary basis and price cap measures should in no way affect long-term contracts. The minister called the EU’s proposal that Member States should inform the Commission in advance if they intend to conclude a contract for the purchase of more than 472 million cubic meters of gas “nonsensical and unacceptable.”
Budapest is equally opposed to the EU operating solidarity mechanisms. Under the Commission’s proposal, the bloc would set default rules on solidarity, which will ensure that a Member State facing an emergency will receive gas from the others in exchange for fair compensation. The obligation to provide solidarity will be extended to non-connected Member States with LNG facilities provided that the gas can be transported to the Member State where it is needed.
According to Szijjártó, it was unthinkable that natural gas bought with Hungarian taxpayers’ money and stored in Hungary should be given to other countries. “European bureaucrats and a number of Member States are currently trying to ban natural gas from Russia from the European market, but in case of an emergency, would they accept it from Hungarian storage?”

Exemption from gas price cap
Hungary received an exemption from the EU’s gas price cap at the latest EU Council Summit this month. Prime Minister Orbán celebrated the decision as a victory of Hungarian politics, saying the gas price cap was a threat to Hungary’s safe gas supply. According to Orbán, the European Commission’s energy proposals had posed the biggest threat to Hungary. “By adopting them, we would have risked gas supplies to Hungary being stopped within just a few days,” he pointed out. Orbán wrote that even if there were to be common gas procurement in Europe, that would not be mandatory for Hungary, and all procurement opportunities will continue to remain open. “This is important because we can only reduce the price of energy in our country if we have as many sources at our disposal as possible, if competition on the Hungarian energy market is as keen as possible,” he added.
The Hungarian opposition pointed out that the exemption was not in the interest of Hungarian people. On the one hand, Hungary already pays a very high price for Russian gas purchased under a long-term supply contract. On the other hand, a common European purchase platform would almost certainly guarantee lower prices given the sheer amount of gas that would be bought this way.