Péter Magyar’s programme is based on deception
An internal document leaked about Tisza’s plans for radical tax increases caused widespread outrage. The scandal was further fuelled by recordings in which the party’s vice-president said that they should not talk about austerity measures during the election campaign, but that if they won, “anything would be possible” and that if they said everything, they would lose. The deceptions do not end there: Tisza’s energy policy is as misleading and damaging as its tax policy.
As part of his programme presented on 20 August, Péter Magyar would join one of Brussels’ most important endeavours in its policy towards Ukraine and put an end to Hungary’s energy purchases from Russia. Péter Magyar promises that the measure would lead to greater independence and more favourable purchasing conditions, but in reality it would pose serious risks to security of supply and lead to price increases. A previous analysis shows that cutting off Russian gas would increase Hungarian families’ utility bills by three and a half times, which would mean more than half a million forints in additional costs per year for an average household. A ban on oil from Russia would have similarly serious consequences.
Supply problems, skyrocketing fuel prices
Geographically and historically, Hungary is dependent on oil imports, and it can satisfy its needs via two main routes: the Druzhba pipeline from Ukraine and the Adria pipeline from Croatia. Currently, more than two-thirds of the Hungarian and Slovakian markets are supplied by Russian oil purchased via the Druzhba pipeline. If this were not available, countries in the region would face serious difficulties at two levels.
The first problem would be securing the necessary quantity. Hungary and Slovakia imported a total of 12.45 million tonnes of oil in 2024, but the maximum capacity of the Adria pipeline is only 11.8 million tonnes. Elimination of the Druzhba pipeline would therefore represent a severe constraint on regional fuel supplies.
The second level of the challenge would be damage to the mixing ratio of the refiners. The facilities in Bratislava and Százhalombatta can operate optimally when processing Russian and Western types of oil in fixed compositions. A ban on Russian oil would make the current ratios unsustainable, which would reduce the efficiency of refineries and further limit the maximum amount of fuel that can be produced in both countries.[1]
The two refineries produced a total of 3.15 million tonnes of petrol and 6.7 million tonnes of diesel fuel in 2024, but a decline in supply would reduce both volumes, which demand would also have to adjust to. This would lead to fuel shortages in the short term and price increases in the medium term. Based on the average prices in Hungary in 2024 and the European Central Bank’s price elasticity analysis, the new market equilibrium would be established at prices significantly higher than the current ones: petrol would cost 1026 forints per litre and diesel 1051 forints per litre.
Péter Magyar’s programme would therefore harm Hungarian families’ livelihoods not only through tax increases and rising utility costs, but also through higher fuel prices. The latter would also be reflected in transport costs and thus in the economy as a whole, leading to general inflationary pressures.
[1] The magnitude of the decline can only be determined once the new composition and additional investments made prior to the change are known; however, based on the available information, a degradation of up to 30% cannot be ruled out. This analysis is conservative, assuming a 15% decline.
