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Record high “market prices” introduced in the Hungarian residential electricity and gas markets
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On 21st July 2022, Szilárd Németh, Minister for the protection of household utilities, held a press conference about the changes made in the pricing of household electricity and natural gas. For a government-set average consumption, a price-capped tariff of 36 forints per unit for electricity and 102 forints per unit for natural gas will be used. For above average usage of these utilities, a much higher tariff will be used, which can significantly increase the monthly expenses of households.
On 21st July 2022, Szilárd Németh announced the changes made in the pricing of household electricity and natural gas, effective 1st August. For a yearly electricity usage of 2523 kWh (equivalent of 210 kWh monthly use), the current, discounted tariff of 36 forints per unit will be used. For a yearly usage of 1729 cubic meters of natural gas (equivalent of 144 cubic meters monthly use), the discounted tariff of 102 forints per unit will be used. These changes were introduced in the Hungarian Gazette the same day.
For a government-set, ‘above-average’ usage of these utilities, the prices will be significantly higher: 70.1 forints per unit for electricity and 747 forints per unit for natural gas.
It makes electricity twice, natural gas seven times more expensive compared to price-capped tariffs.
Let’s illustrate it with an example: for a monthly use of 210 kWh electricity, 7560 forints are paid, whereas for 144 cubic meters of natural gas, 14,668 forints are paid. If we just increase consumption by 50%, the bill comes to a much higher total: 315 kWh electricity costs 14,921 forints, 216 cubic meters of natural gas costs 68,472 forints. For the same amount, calculated on the price-capped tariff, one would have paid 33,372 forints previously. With the new regulations in motion, the bill comes to a total of 83,393 forints, which is a 50,021 forints increase in monthly expenses for a household.
With the utility calculator, one can calculate the monthly expenses for their utility usage.
Within the EU, the Hungarian price-capped tariff was one of the cheapest – data from June 2022 show that gas was the cheapest, electricity was the second cheapest in Hungary. With the new, above-average tariffs Hungary’s position changes significantly: the 70.1 forints per unit electricity price takes Hungary to the seventh place from the bottom, and with the 747 forints per unit gas price the sixth from the top.
According to Szilárd Németh, the government-set ‘household market price’ is much lower than the alleged global market price, which would be 268.9 forints for electricity and 1020 forints for gas. There is no information about their methods of calculations, but if there were the real numbers, it would put Hungary on the number one place for both utilities.
Translated by Krisztián Szabó. The original Hungarian version of this story was written by Krisztián Szabó and can be found here.