Hungary declares state of emergency over energy shortages
Hungary's government has declared an "energy emergency," announcing plans to remove the cap on residential electricity and gas prices when consumption exceeds the household average.
Prime minister Viktor Orban's chief of staff Gergely Gulyas announced the move late on July 13, blaming the energy crisis not only on the Russia's invasion of Ukraine, but also EU sanctions against Russia. Hungary has vocally opposed these sanctions, and Orban traditionally sought warmer ties with Moscow before the war.
"Due to the protracted Russia-Ukrainian war, and the Brussels sanctions against Russia, energy prices are rising dramatically throughout Europe," Gulyas said at a press conference. There will most likely not be enough gas this coming winter, and so the government's seven-point action plan that will come into effect next month is necessary, he said.
Besides the removal of the price cap for higher energy consumption, Hungary will also ramp up domestic gas supply from 1.5 to 2.0bn m3, prioritise the filling of its gas storage facilities, currently at 44% capacity, and ban energy exports. The government will also increase production of lignite coal, restore units at the Matra coal-fired power plant "as soon as possible," and extend the operational hours of the Paks nuclear power plant.
Gulyas defended the removal of the price cap, saying that in a wartime energy crisis, it made no sense that everyone received unlimited gas and power supply at reduced prices. The average monthly consumption of electricity per household in Hungary is 210 kWh, while average gas consumption is 1,729 m3 per year.
The government estimates that three quarters of households will not be affected by the move, and an exception will be made for large families.
"Prices are skyrocketing, supply is faltering, and in the economic sense, an extraordinary situation has arrived," Gulyas said. "Therefore, it is now necessary to unite with the citizens of Hungary and all Hungarian actors who can do something to ensure energy supply."