Gulyas: state institutions and companies ordered to reduce their gas consumption by 25%

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The Hungarian government has asked public institutions and public companies to reduce their gas consumption by 25% as an energy-saving measure, the prime minister’s chief of staff said on Thursday.

The rule does not apply to hospitals or social care institutions, Gergely Gulyas told a regular press briefing.

Gulyas said the energy supply situation was difficult across Europe and rising energy prices had caused an economic crisis.

“It is clear that the sanctions policy has not lived up to expectations,” he said. Energy prices have soared, triggering an energy crisis, and Russia is pocketing additional profits, he said.

While Hungary does not suffer from gas supply problems, rising prices are prompting cautious consumption, he added.

Hungary currently runs the largest household utility price support program in Europe, he said. Price subsidies, up to average consumption, are available up to 150,000 forints (375 euros) per household, he said.

Meanwhile, Gulyas said the government will cap firewood prices. Firewood will also be available for purchase from logging companies, which will be able to provide 10 cubic meters of wood to all customers ahead of the heating season, enough to heat a private home during the winter, he said. declared.

The government will also launch a “coal programme” in the coming days and raise the surface mining limit from 50,000 tonnes to 280,000 tonnes, he said. The government will have pre-emption rights on the lignite produced, he added.

Small and medium enterprises with high energy needs will receive support to pay their gas and electricity bills, he said. The government will develop a support package to ensure supply lines remain intact, albeit with declining profits, to avoid mass unemployment that would result from supply line disruptions, he said. declared.

The price of district heating will be kept at the same level and the government will launch a program to provide all apartments in the network with individual meters, he said. The latter will concern some 140,000 apartments and will take 4 to 5 years, he said.

Regarding Hungary’s talks with the European Commission, Gulyas said that consultations were underway on the procedure regarding the conditionality mechanism that links EU funding, the post-pandemic recovery fund and the seven-year budget of Hungary. EU to the rule of law. The EC aims to conclude the procedure of the conditionality mechanism first, and the government has accepted this, Gulyas said.

The government agrees with the EC that the efficient and transparent use of EU funds is a shared interest, he said, adding that the government has provided all the guarantees requested by the commission, adding that both parties reached agreement on all professional issues. .

Gulyas expressed hope that the talks led in Brussels by Justice Minister Judit Varga, Tibor Navracsics, Minister for Regional Development, and Janos Boka, Secretary of State for European Affairs, will produce results. He also called on left-leaning MEPs to stop working to “block Hungary, Hungarian teachers and health workers from European funds to which Hungary is entitled”.

Meanwhile, Gulyas said Hungary will revamp its bond strategy. The state debt management center (AKK) will issue bonds with an initial interest rate of 11%, the “best offer in the market”, in September, he said.

Asked about the firewood price cap, Gulyas said the cap would be in effect from next Thursday until at least the start of the heating season. The government has consulted forests and the agriculture ministry about the scheme, Gulyas said, quoting the ministry as saying that if firewood were to run out, more could be cut. Meanwhile, he said government calculations indicated the price of district heating could remain unchanged for the coming winter.

The government is also discussing energy costs with local councils, Gulyas said, adding that he will meet the head of the Association of Towns with County Rights this week. Local councils have a responsibility to try to save energy on their own and save enough money to be able to afford the price increase, Gulyas said, adding he was ready to talk to everyone and to help those he can.

The government aims to keep nurseries, kindergartens and schools open, he said. Basic services must be guaranteed everywhere, but if necessary the government is ready to step in to ensure they are provided, Gulyas said.

The government will arrange for state energy supplier MVM to offer reduced prices to local councils, he said.

Meanwhile, Gulyas said the cabinet will discuss price caps for basic food items next week or the week after.

On another topic, Gulyas said the government has yet to understand the EU’s proposal to impose a price cap on Russian gas and is awaiting details. He added that since Europe imported its gas, there was no point in discussing a price cap at the moment.

If sanctions on Russian energy were to be lifted tomorrow “everything would be halved, including prices and inflation”, Gulyas said, adding that the European Commission had chosen to go “in the opposite direction”. This is not harming Russia, but rather “bringing it huge profits”, he insisted.

Gulyas said it was hard to see how Ukraine could “get back on its feet”, so the country needed help. “But because of the damage caused by the sanctions, there will eventually be hardly any European countries that can help, which could lead to a tragic situation,” he added.

Asked about calls to ban EU visas for Russians, Gulyas said he agreed that there was no point in imposing such a restriction.

Asked about reports that the opposition received funding from abroad for its election campaign, Gulyas said this was illegal and should be investigated. “If someone receives money from abroad, it cannot be ruled out that they end up representing foreign interests,” he said.

“The accusation in question is serious and there are already confessions,” Gulyas said, referring to comments by Peter Marki-Zay that his campaign had received financial support from the United States.

On EU enlargement, Gulyas criticized the bloc for “discouraging” Serbia from wanting to join, adding that Serbia’s EU membership would be in the interests of both parties.

Asked about the Polish Prime Minister’s remarks on the Visegrad Group, Gulyas described Polish-Hungarian cooperation as the “engine” of the alliance, with all member states benefiting from it. The two countries had argued over their approach to the Russian-Ukrainian war, he said, adding: “If we can agree to disagree and focus on things we agree on , there is no reason why we cannot strengthen Cooperation V4. It is in the interest of all the countries concerned,” he said.

Responding to a question about the crisis in the production of artificial fertilizers, Gulyas said that 70% of the product is made up of natural gas. Until the European Union finds a way to break the price spike, “we will have to find alternative solutions”, which is the responsibility of the agriculture ministry, he said.

On next year’s budget, Gulyas said the government is not currently planning to change the law. Changes are still possible after the revision of economic indicators from November-December, he said. Details will be decided later as the economic outlook for next year is extremely uncertain, he added.

In response to a question about whether the government managed to buy an additional 700 million cubic meters of gas, Gulyas said that Hungarian gas reserves were currently 65.4% full. This is enough to provide 81 days of industrial and domestic consumption, or 175 days of home heating, he said.

Gulyas said the government was setting up the Integrity Authority, a body to review and, if necessary, suspend EU tenders. The body was created at the request of the European Commission, which the government “did not oppose”, Gulyas said.

In response to a question about the Matrai power plant, Gulyas said the coal-fired plant would “definitely” operate until at least 2029. In the meantime, green investments will continue, he said.

Regarding the modernization of the Paks nuclear power plant, the minister said that the head of the company will take care of the works related to the investment and that it is “realistic” that important works can start in next fall.

The government plans to set up a cement factory to avoid supply chain disruptions as other factories sputter, he said.

Asked about the state’s involvement in the Vodafone purchase, he said an assessment of the company’s value was underway and the state would await its outcome.

Meanwhile, Gulyas said the government could decide on any further pension increases in September.

He said it could not be ruled out that large employers could benefit from central overhead support.

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