Hungarian consumers continue to pay the lowest utility prices in Europe, according to the latest international price comparison by the Hungarian Energy and Utilities Regulatory Authority (MEKH). Conducted in May, this is the latest evidence that Hungarian Prime Minister Viktor Orbán’s energy policy is paying off.
The average price of natural gas for residential consumers is the lowest in Hungary, even measured in purchasing power parity.
According to the MEKH report, in May, the average household price of natural gas in Budapest was 2.75 euro cents per kilowatt-hour (kWh), which is the lowest among the capitals included in the survey. The average household price of natural gas in May was 19.04 euro cents in Vienna, 26.85 euro cents in Amsterdam and 14.92 euro cents in Prague.
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Hungary’s low gas prices have much to do with the country’s reliance on cheap Russian energy, with the government of Viktor Orbán stressing that Hungarian households should not pay the price for the war in Ukraine. Orbán has routinely sought to ensure Hungary is exempted from oil and gas sanctions against Russia.
This cheap energy has translated into the average household price of electricity in Budapest being the second-lowest in Europe at 10.17 eurocents per kWh in May, with consumers only paying less in Belgrade. However, the same amount of electricity cost 49.32 cents in Rome, 40.14 cents in Prague and 47.44 cents in Vienna.
The average price of residential natural gas measured in purchasing power parity was the lowest in Budapest in May, 0.0438 PPS per kWh (purchasing power standard, the European purchasing power unit), while Hungary ranked the third cheapest in the case of electricity at 0.1616 PPS.
The MEKH report also examined the ratio of the costs of electricity and natural gas consumption to net income on a monthly basis, i.e., how much of a household’s monthly income is spent on electricity and natural gas consumption.
In Budapest, it was 2.6 percent in May, the second best value after Luxembourg. By comparison, in the same month, households spent 11.7 percent of their income in Sofia and 8.8 percent in Prague on energy.
In Hungary, as a result of utility price reductions, the price of electricity and natural gas paid by consumers using the public service is fixed by law, which means the Hungarian population is protected against price increases in the markets, MEKH said.
Last week, the Hungarian government slapped a 800 billion forint (€2.01 billion) windfall tax on large corporations — mainly energy companies and banks — to reduce the budget burden related to subsidizing energy costs, including utility bills and state-capped automotive fuel prices.