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Aug 18, 2016

Hungarian government explores further energy price cuts

The Hungarian government has transformed the energy sector by creating a state-owned, not-for-profit national energy holding company

The Hungarian government is looking at further ways to cut energy prices, Miklos Sesztak, Development Minister, told Figyelo today.

The already evident energy price cuts, which cut more than 20 percent off natural gas and electricity bills in recent years and added to a sharp drop in inflation, were a successful part of the government retaining their seat at the last election.

Hungary will face national elections in 2018, and Sesztak said the government was again exploring the energy price cuts.

"The primary goal is to preserve the results of the energy price cuts executed so far," he said. "We need to look into whether, in a more efficient system, taking advantage of synergies, we can cut more. I think that is possible."

Hungary's government has transformed the energy sector by purchasing assets from foreign companies such as Germany's E.ON and RWE, and creating a state-owned, not-for-profit national energy holding company.

The firm, ENKSZ, says it expects to be supplying natural gas to all Hungarian households by Oct. 1, Reuters reports today.

Sesztak declined to say how large the new energy price cuts may be, adding that the outcome of ongoing European Union infringement procedures about the previous round of price cuts would affect that decision, as would the development of natural gas prices and domestic synergies.

The government says energy should not be a profit-oriented sector, but rather a domestic asset that boosts Hungary's competitiveness by providing affordable energy to households and cheap energy for industry.