The Hungarian energy office MEH said Thursday the government shouldn’t lower natural gas prices in April or July despite lower world-market oil prices, since gas prices failed to follow import price developments in 2005 and 2006.
Hungary’s natural gas import prices are tied to oil price developments with a six- to nine-month delay. Natural gas prices are mandated by the government in Hungary and are a highly political issue.
As the government didn’t raise domestic gas prices in 2005 and 2006 as much as import gas prices, “no proposal can be made or would be reasonable to make to the economics minister on a temporary price cut, because of the accrued considerable loss of revenue (at gas trading companies),” MEH said in a statement.
MEH makes the price proposals to the economics minister.
Hungary is nearly solely reliant on imported gas and most of its imports come from Russia.
MEH made the statement in reaction to local press reports that gas prices could rise in July.