In a letter to European Council President Charles Michel, Prime Minister Viktor Orbán has proposed leaving the European Union’s latest sanctions package against Russia off the agenda at a meeting of the council to be held at the end of the month. PM Orbán said in his letter that if approved, the sanctions would immediately cause severe disruptions to Hungary’s energy supply, undermining the country’s energy security interests. PM Orbán said the sanctions would cause a 55-60 percent increase in fuel prices at a time when energy prices are already at a 40-year high. Neither Hungarian households nor the Hungarian economy can withstand such a price shock, he added.
According to MTI, the prime minister said Hungary is still heavily dependent on Russian energy imports despite the fact that large-scale investment projects aimed at diversifying the country’s energy sources and routes have led to a decrease in Russia’s share in Hungary’s supplies from over 90 percent in 2010 to 64 percent in 2021. “Due to our geographical situation, phasing out Russian oil for Hungary is not possible without a complete rearrangement of our refinery capacities also requiring increased and accelerated investments in our energy infrastructure and a speedy green transition,” Orbán said. He warned, at the same time, that since most of those investments could not be financed on the basis of the market, the sanctions would require diverting national resources to redundant fossil investments “while relevant funding from the European Union for us is only available on paper”.
The prime minister said that though there had been encouraging signs from the European Commission that the REPowerEU Plan would provide a satisfactory solution to the problems facing the bloc, “the plan presented on May 18 fails to specifically and comprehensively address the serious concerns we have raised”. He said that according to the Hungarian government’s interpretation, one of the main objectives of the REPowerEU Plan should be to rapidly reduce the EU’s dependence on Russian fossil fuels. As regards the security of oil supply, the plan does cover the modernisation of petroleum product refineries, the expansion of the capacity of the existing infrastructure and the tackling of existing bottlenecks, the prime minister said. He added, however, that the plan did not set a financial framework for landlocked member states. Neither does it provide any guidance for the methodology and schedule for the financing of the urgent investment needs related to replacing Russian oil, Orbán said.
The prime minister also said the REPowerEU Plan did not take into consideration member states’ different energy needs stemming from their different energy mixes. “We believe that it is crucial to clearly distinguish short-term investment needs related to the reduction of Russian energy dependency from the longer-term transition to renewable energies,” PM Orbán said. He emphasised that this was crucial for member states like Hungary, arguing that “the two cannot be achieved at the same time without putting our energy security at serious risk”.
Photo credit: Facebook/Orbán Viktor