Péter Szijjártó, Minister of Foreign Affairs and Trade, said that although European Union member states have yet to reach a decision on the introduction of a price cap on gas imports, Hungary has succeeded in having two “particularly dangerous” provisions removed from the proposal.
After a meeting of EU energy ministers, the foreign minister said the Hungarian government maintains its position that introducing a price cap on gas “is a bad idea and it is useless”. He said most EU member states, with the exception of Hungary, would accept the introduction of a price cap, but disagreed on the details of the planned measure. “We think that the price cap is a bad thing, it is unnecessary and it is a dangerous idea raised as a solution to tackle the energy crisis,” Minister Szijjártó said. He said the price cap had been designed as a response measure to record high gas prices in the summer, noting however that prices had gone down and stabilised without any intervention in the past couple of months. He warned that the scheme could also allow wide-scale speculation, putting the EU at a disadvantage.
What’s even more important is that the proposal would seriously endanger energy security, Minister Szijjártó said, arguing that it was physically impossible to completely replace Russian natural gas in the medium term, and the price caps would further reduce the volume of gas the bloc would have access to. “The whole proposal is harmful, dangerous and threatens the security of the European energy supply,” Minister Szijjártó said. He said the plan went against the European Council’s guidelines according to which the price cap could not apply to long-term supply agreements and had to take into consideration the specific energy situation of member states. Szijjártó said the price cap interfered with pricing on the Dutch TTF gas hub and would impact long-term gas supply agreements.
At the same time, the minister welcomed that two provisions had been removed from the proposal. One of them concerned the regulation of prices when it came to transactions outside the gas exchange, Minister Szijjártó said, adding that this would have restricted member states’ freedom to procure gas as it would have made bilateral agreements without the application of the price cap impossible. The other proposal would have required member states to consult the European Commission prior to amending any long-term gas supply deals, Minister Szijjártó said, adding that this provision “would have totally destroyed the security of Hungarian gas deliveries”. As no agreement was reached at Tuesday’s meeting, the price cap plan will be back on the agenda next week, the minister said.