The energy policy of the left would increase the overhead bill of Hungarian families by an average of HUF 112,000 in March
Since the outbreak of the Russian-Ukrainian conflict, the Hungarian left has repeatedly argued for stopping Russian energy imports immediately. The measure would force Hungary to end its overhead cost reduction program and households would have to pay market prices for gas. If the claim were to be realised, there would be a 7.2-times increase in the Hungarian gas bill in March.
Due to the overhead cost reduction program, Hungarian families are not directly facing the drastic rise in energy prices caused by the European energy crisis and the Russian-Ukrainian conflict. Household needs are covered by a long-term Russian gas contract signed las summer, the termination of which would force energy suppliers to purchase on the market.
Since the outbreak of the war, several left-wing representatives have called for an immediate gas embargo. The realisation of the claim and the switch to market purchases as a consequence thereof would have caused a significant additional cost to the Hungarian population already in March. At present, gas-consuming households receive an average bill of HUF 13,000 per month.
As a result of the left-wing energy policy, this amount would increase to HUF 94,000 in March.
As the number of people living in a household has the greatest impact on the amount of gas consumed, the left-wing proposal would place an increased burden on large families. While market procurement would cause a price increase of HUF 60,000 for a single person, the gas bill of a large family of eight would increase by almost HUF 138,000.
Péter Márki-Zay would completely abolish the overhead cost reduction program
The left-wing candidate for prime minister has repeatedly stated that he would eliminate the overhead cost reduction and introduce market prices instead, which, in addition to the household gas consumption presented earlier, would also affect electricity consumption. If market-based price regulation had been in place in March,
there would have been a 4.3-times increase in the electricity bills expected to arrive in some days, from HUF 9,000 to HUF 40,000 for an average household.
Like gas consumption, electricity consumption is most affected by the size of the household. The current bill of HUF 6,000 for a single person would increase to HUF 26,000, and the bill of a large family of eight would increase from HUF 18,000 to HUF 76,000.
In households where both electricity and gas are consumed,
there would be a six-times increase in energy spending, from an average of HUF 22,000 to HUF 134,000
due to left-wing claims. The total cost of a single person would increase from the current HUF 16,000 to HUF 95,000, and the expenses of a household with a large family of eight would increase from HUF 40,000 to HUF 236,000.
Data used and method applied
To determine the tariffs calculated on the basis of market prices, the item of „energy charge” included in the components of electricity and natural gas tariffs in households and published by Eurostat in the first half of 2021, was adjusted based on the average prices of the Hungarian Power Exchange and CEEGEX (Central Eastern European Gas Exchange) in March 2021. The rate of VAT of the tariffs have been modified proportionately. The euro exchange rate was calculated based on the monthly average data of the Magyar Nemzeti Bank. The breakdown of household expenditure by income and living together was carried out on the basis of the latest available Household Budget and Living Conditions Survey of 2019 conducted by the Central Statistical Office.