Hungary declares ‘energy emergency’ over threat of fuel shortages

Russia’s war in Ukraine and sanctions by European Union have led to “energy crisis” on continent: PM’s chief of staff.

Hungary’s government has declared an “energy emergency” in response to supply disruptions and skyrocketing energy prices in Europe, an official said.

Russia’s war in Ukraine and consequent sanctions from the European Union have led to an “energy crisis” on the continent, Gergely Gulyás, Prime Minister Viktor Orbán’s chief of staff, said on Wednesday.

There is “unlikely to be enough gas in Europe for the autumn and winter heating season”, and Hungary will increase its domestic energy production capacities to ensure adequate supply, Gulyás told a news conference in the capital, Budapest.

“The prolonged war and the sanctions from Brussels have caused energy prices to rise dramatically across Europe, and in fact, a major part of Europe is already in an energy crisis,” Gulyás said.

Hungary will boost its annual production of natural gas from 1.5 billion cubic meters (52.9 billion cubic feet) to two billion cubic meters (70.6 billion cubic feet), increase the extraction of lignite (brown coal) and put a currently non-functioning lignite-fired power plant back online, Gulyás said.

Energy exports will be banned, and Hungary’s only nuclear power plant will also increase its production by extending its operating times, he added. The measures will go into effect in August.

Gulyas said that, for the time being, Hungary’s gas supply was uninterrupted, and any future restrictions, should they be needed, would affect households as a last resort.

“Wastefulness can no longer be afforded anywhere,” he said.

“Every alternative should be looked at that provides incentives for the most sparing use of energy in the economy.”

‘Energy emergency’

The announcements came after Orbán convened a meeting of his cabinet earlier on Wednesday to discuss what he called an “energy emergency” in Europe.

Hungary is heavily dependent on fossil fuels from Russia, and last year signed a 15-year agreement with Russian energy company Gazprom for the purchase of natural gas.

Hungary gets approximately 65 percent of its oil and 85 percent of its gas from Russia.

After Moscow launched its war against Ukraine, the EU, of which Hungary is a member, sought to target Russian oil exports with sanctions.

Orbán fought vigorously against such measures by the EU, arguing that blocking Russian oil would cripple his country’s economy.

Hungary’s prime minister managed to negotiate a concession which allowed a temporary exemption for oil imports delivered by the Russian Druzhba pipeline to certain landlocked countries like Hungary.

Earlier on Wednesday, Hungarian Foreign Minister Péter Szijjártó said at a meeting of regional foreign ministers that Hungary would seek to buy an additional 700 million cubic meters (24.7 trillion cubic feet) of gas before the European autumn, but did not specify from where.

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.