Hungary’s government opposes a tax Brussels wants to impose on home and car owners on the grounds of fighting climate change and is committed to protecting the achievements of its scheme to reduce household utility bills, the prime minister’s chief of staff said on Thursday.
Energy prices are soaring all across Europe, resulting in a “utility crisis,” Gergely Gulyás told a regular press briefing, adding that this will be the central topic at a summit of European Union leaders starting in Brussels on Thursday.
Gulyás said rising global energy prices and the European Commission’s “poorly thought out” energy policy were both to blame for the situation. He said the biggest danger was that the EC would push the price increases onto consumers by taxing home and car owners.
The Visegrad Group countries will veto and reject such a proposal, Gulyás said. Hungary’s government is firmly committed to protecting the achievements of its public utility cost reduction scheme, he added.
Gulyás said recent measures imposed by the EC had contributed to the crisis, arguing that on the grounds of climate protection Brussels had forced the move away from traditional energy production while liberalizing gas and electricity markets without a transition period. Also, when the first signs of the crisis began to appear last year and this spring, European gas storage facilities had a record low amount of gas, he said. “As demand was rising, supply was falling and Europe’s long-term gas supply deals were set to expire,” he said. “And for six months, Brussels did nothing; it held no talks with Europe’s energy suppliers.”
He said Brussels’s latest proposal would be extended to transport, cars, public buildings and family homes. This, Gulyás said, meant that instead of applying the “polluter-should-pay” principle and making multinational companies bear the costs of environmental protection, Brussels would impose a tax on people’s homes and cars.
The price of natural gas has increased by 400 percent on the European markets over the past year and the price of electricity by 80-100 percent, he said, adding that utility costs were up everywhere but Hungary.
Hungary has the lowest gas and electricity prices, Gulyás said, adding that households in Vienna and Berlin today were paying two to three times more for electricity and gas than in Budapest.
If the government made Hungarians pay the market price for gas and electricity, as proposed by the left, an average Hungarian family would be paying over 386,000 forints (EUR 1,065) more in utility costs annually, he said, noting that Hungarians were paying 40 percent of the international price for electricity and 30 percent of the market price for gas.
Gulyás said Hungary’s Socialist-liberal governments between 2002 and 2010 had given multinational energy companies permission to raise prices 15 times. This led to a 206 percent increase in gas prices and a 97 percent increase in electricity prices, he said, noting that in contrast, utility costs had decreased over the past eight years.
Gulyás also criticised Brussels’s proposed ban on the sale of new petrol and diesel cars from 2035. “Budapest’s left-wing leadership is already talking about banning diesel cars and introducing a congestion charge while multinational companies pollute the environment without any consequences,” he said.
Featured photo by Lajos Soós/MTI