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Minister shared how long price caps can remain in effect in Hungary
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The government has reviewed the energy situation in Hungary and said the resources are at hand to maintain utility price caps up to average consumption for households, the head of the Prime Minister’s Office told a regular press briefing on Thursday.
Energy price scheme and war
At a cabinet meeting on Wednesday, the government reviewed the energy situation and concluded that the price caps could be maintained until end-2023 and even beyond, he said. At the same time, high energy prices are a burden on the Hungarian economy, and harm its competitiveness and industrial performance, he said. The government will also help some 14,000 companies, local authorities and churches, which under current legislation would pay for energy at last December’s prices as they failed to renew their contracts with the provider before that date, MTI wrote. The government will enable them to renew those agreements at the current prices, Gulyás said. State-owned energy provider MVM will absorb the 20 billion forint (EUR 53.1m) loss, he added.
Gulyás also said the government welcomed the pro-peace resolution adopted by parliament last week, adding that the most important consideration was for there to be a ceasefire, peace talks and peace in Ukraine as soon as possible. Hungary remains committed to peace, but it became clear last week in parliament that “not everyone on the Hungarian political stage agrees with this,” he said. He said the government interpreted the outcome of last year’s general election as proof that the majority of Hungarian voters also wanted peace. The resolution approved by parliament condemns the military attack against Ukraine and emphasises the importance of humanitarian operations “in which Hungary has had a significant share over the past year”, Gulyás said. He said the state and NGOs worked together “in exemplary fashion” so that Hungary, the first safe country they reached, could accept all refugees from Ukraine.
Water loss
At the Wednesday cabinet meeting, the government also tasked Energy Minister Csaba Lantos with drafting a proposal on revamping Hungary’s water supply system and on uniform prices for water utilities. In view of current energy prices, the government has given the opportunity to local authorities to put water utilities into the hands of the state, he said.
The government said the reconstruction of the water pipelines was long overdue. Overall water loss in Hungary’s water system is 22 percent, but some regions see 60 percent of the water leaking from the system before reaching consumers, he said. When introducing the utility price caps, the government capped the prices of water utilities at the prices at the time, leading to large regional price differences by today, he said.
Government spokeswoman Alexandra Szentkirályi said consumer protection services had conducted a “price cap inspection” between January 23 and 29, and launched 334 procedures as a result. About half, 179 procedures have already been concluded, with shops fined a total of 333.3 million forints. Most offences included cases where price-capped products were found in the shop’s warehouse but were missing from the shelves, she said. The authorities will also launch an online price-monitoring system to look for unreasonable price hikes, and to ensure the sharpest possible competition among shops, she said.
Food price caps
Asked about price caps on basic foodstuffs, Gulyás said they are set to expire in two weeks’ time, and the cabinet will decide on them at its next meeting. The government’s aim is to push inflation into the single digits by the end of the year, he noted, adding that if that goal is reached, inflation could return to “a normal level” next year. Asked why the government was not cutting the retail market price of gas and electricity, Gulyás said the fluctuations in gas and electricity prices were “hectic”, and the prices would have to be changed “every two weeks”. The government’s principle is to keep the price caps on utility bills in place in line with the new regulations, he said. Asked to comment on the left-wing opposition’s refusal to support the government’s pro-peace resolution, Gulyás said the left’s positions on weapons deliveries “or sending troops to the war in Ukraine” had been rejected by an overwhelming majority of voters in the last general election.
Citing recent polls, he said the ruling parties would win again if an election were held today. He said the reason for this was that the left had been “bought off” but was “prepared to engage in childish confrontations”. He criticised what he called “tragicomic” attempts by independent lawmaker Akos Hadhazy and the opposition Momentum party to disrupt Wednesday’s cabinet meeting by removing the barricades in front of the Castle District premises of the Prime Minister’s Office, saying the opposition politicians had been there to “make a scene”. Referring to the opposition’s campaign donations from the United States, Gulyás said that “if these MPs acted this way in the country from which they got their money for the election campaign, then — if they’re lucky — they would have been arrested, or something even worse would have happened to them.”
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EU funds
“This is the kind of infinitely tolerant country we are,” he added. Meanwhile, Gulyás said Hungary could reach an agreement with the European Commission on its receipt of EU funds “at any time”, arguing that the deal was up to the commission. Though the EC keeps making more and more demands, the government is confident that an agreement will be reached on the issue around the judiciary, he said. Gulyás added, at the same time, that the EC “doesn’t even meet its own deadlines”.
Criticising the left-wing opposition for “working to prevent Hungary from accessing these resources”, he said left-wing MEPs should represent the interests of the country, but instead “they and their European Parliament groups are putting pressure on the European Commission” to withhold the funds. Gulyás said opposition MEP Istvan Ujhelyi was incorrect in his assertion that Hungary had the funds it needed to raise the wages of teachers. Though Ujhelyi cited statements from the European commissioner in charge of employment and social affairs, “what the commissioner said can’t be verified”.
They lie about the average consumption. It is 330kw and not 210kw like they claim.