BUDAPEST (Reuters) – Hungarian Prime Minister Viktor Orban has convened a cabinet meeting on Wednesday to discuss supply problems affecting the European energy market, Orban’s press chief said in a statement.
The statement said the prime minister called the meeting due to rising energy prices as a result of the war in neighbouring Ukraine and the prospect of European gas shortages in autumn and winter. Orban posted a photo of the meeting on Facebook with a caption saying “Energy emergency in Europe!”
Under a 15-year deal with Gazprom signed last year, Hungary receives 3.5 billion cubic metres (bcm) of gas per year via Bulgaria and Serbia under its long-term deal with Russia, and a further 1 bcm via a pipeline from Austria.
Foreign Minister Peter Szijjarto said Budapest was in talks to buy more gas before the heating season, on top of its existing long-term contract with Russia, which supplies 85% of the country’s gas needs.
On Monday, Szijjarto told parliament that Hungary was receiving about 90% of the agreed deliveries on a daily basis due to lower imports via the pipeline from Austria, with half of Hungary’s imports coming from the south.
Orban’s government has also authorised state energy group MVM and the Hungarian Hydrocarbon Stockpiling Association to buy additional amounts of gas on the market to fill gas storage ahead of the heating season.
“We estimate that it is possible to buy 700 million cubic metres of gas before the start of the heating season,” Szijjarto said without specifying who Hungary was talking to about additional supplies.
“This is roughly the physical maximum that we can store on top of our long-term contracts,” he said, adding that the country’s storage, which has capacity for 6.33 bcm of gas, was 44% full, representing about a fourth of annual consumption.
Financial news website portfolio.hu cited unnamed market sources as saying that Orban’s government was looking at a syndicated bank loan to finance the cost of additional gas purchases, estimated at up to 1 billion euros ($1 billion).
A government spokesman did not immediately respond to emailed questions for comment.
Orban passed a decree last month, empowering his government to take over supervision of vital energy firms and gas pipeline network operator FGSZ in an emergency that requires it to ensure continuous supply.
Economists at Wood & Company said Hungary was the most exposed central European country to a potential energy shortage, which could put additional pressure on the forint, central Europe’s worst-performing currency.
($1 = 0.9967 euros)
(Reporting by Gergely Szakacs; Editing by Frank Jack Daniel, Tomasz Janowski and Emelia Sithole-Matarise)
