According to our calculations, in April the Hungarian state gas trader could pay about HUF 317 per cubic meter for Russian gas on the stock exchange (according to our information, our Russian gas contract, from which MVMCEEnergy supplies the public, is clearly adjusted to the price of the Dutch TTF gas exchange). The gas purchased in this way could then be sold to the public for about HUF 82 in the framework of the overhead reduction (energy fee). Therefore, if other items are ignored, According to our calculations, the company may have incurred a loss of HUF 234 per cubic meter.
It is no coincidence that Prime Minister Viktor Orbán also said in a radio interview on Friday that “the overhead reduction is a very difficult financial construction, on the pharmacy balance sheet”. The first half of the figure below really shows that at the start of the overhead reduction, a fee billable to the population was calculated on the pharmacy balance sheet, and only then did the system become a very difficult financial scheme due to the depletion of world gas prices. The area marked in orange shows gas futures prices for the next period and suggests that the burden of maintaining the overhead reduction may remain very significant.
If we multiply the above-mentioned loss of HUF 234 by the 232 million cubic meters of gas that were typically consumed in April in the framework of the universal service protected by overhead cuts, then there is a gas bill of nearly 74 billion forints. Of this, the state-owned company could in principle only bill the public for 19 billion of the overhead reductions, so if other factors were not taken into account, this would mean a loss of 55 billion.
The fact that the state-owned company was forced to buy most of the 232 million cubic meters of residential gas on the stock exchange at a high price of around EUR 100 / MWh is assumed by the end of March.
All this means that there will be a really hefty amount in the gas bill that Foreign Minister Péter Szijjártó will have to pay to the Russian company Gazprom on May 22, according to the announcement.
According to the original Russian presidential decree, in the case of gas delivered after April 1, it would be necessary to switch to “pay in rubles”, ie to exchange rubles in an account opened with Gazprombank, and Péter Szijjártó first payment obligation. Until then, the draft line around the salary in rubles must also be finally settled, it is true now on saturday there was an important briefing pointing towards sorting out (Russians also allowed in the ruble payment debate in two main areas).
The figure below shows that after the soaring prices at the beginning of March (after the outbreak of the war there was a lot of uncertainty) the gas price stabilized around 100 euros on the relevant Dutch gas exchange and the above mentioned gas price of 317 forints we identified it with an overhead fee of HUF 82.
If we also look at what the gas futures price curve for the coming months will say, unfortunately it seems that the price may remain around 100 euros this year, then after the winter heating season has subsided, the price will hopefully fall below 80 euros next spring. At the same time, this would mean that not only now, but throughout the market, the market price of gas would be four to five times the amount for which a state-owned company could sell gas to the public at home as part of the overhead reduction.
So there would be very rough gas bills from the Russians all along,
and that is why the overhead reduction is a very difficult financial construction, as Gergely Gulyás acknowledged a few weeks ago, when he referred to a potential amount of HUF 1,300 billion as an annual burden.
In connection with the sustainability of the Hungarian overhead reduction, our materials have been published in recent weeks:
Cover image source: Getty Images
Source: Portfolio.hu – Gazdaság by www.portfolio.hu.
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