End of Putin-Orbán friendship? Russian gas very expensive for Hungary
The Hungarian government decided during the summer that it would create a special natural gas reserve to prepare for the coming energy crisis. Therefore, it took out a brutal high euro loan and announced that it would buy Russian gas using it. However, a government decree published yesterday showed the purchase was much more expensive than previously calculated. What happened with the Putin-Orbán, Lavrov-Szijjártó friendship and the promise that Hungary would be able to buy cheap Russian gas?
Extra gas for a lot of money
A short government decree was published in the Hungarian Gazette last evening. Based on that, mfor.hu wrote that Hungary’s latest, large-amount gas purchase in July-August was much more expensive than the stock exchange price.
As we reported before, the government decided to take out a euro loan to create a special gas reserve, up to a maximum of EUR 1,850 million. In July, Foreign Minister Péter Szijjártó met Russian Foreign Minister Sergey Lavrov to ask Gazprom to buy an additional 700 million cubic metres of gas. The discussion was successful and the Russians started to transfer the amount. Of course, nobody released information about the price the two ministers agreed on.
Based on the new decree, the extra amount of gas will be owned and stored by the Hungarian Hydrocarbon Stockpiling Association (MSZKSZ) at least until 1 April 2023, which marks the end of the heating season in Hungary. László Palkovics, the minister for innovation and technology, defined the maximum amount of storable gas as 7,811,000 MWh. That transfers to 740,379,147 million cubic metres, stored separately from other security reserves.
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More expensive than the stock exchange price
As mentioned above, the original sum separated for the transaction was EUR 1.85 billion covered by the loan. However, that amount was raised to EUR 2.012 billion in the recently published government decree. That is probably because the previous amount was too low since the Russian gas became more expensive than the government calculated.
If we do the math, we can see that the government could buy 1 MWh of gas for EUR 257.50. However, the gas price on the Dutch stock exchange was below EUR 100 in June and between EUR 100 and 200 in July. Furthermore, Péter Szijjártó, Hungary’s foreign minister, announced the purchase on 21 July.
Mfor.hu writes that, of course, nobody could check out the contract. Thus, they can only guess. They believe the Russian gas the Hungarian government bought was much more expensive than the stock price.
Read alsoEnd of Putin-Orbán friendship? Russian gas very expensive for Hungary
Source: mfor.hu