Gov’t decides gas subsidies to be income-based from 2007

Energy Trade

The government decided on changes to Hungary's system of retail gas price subsidies, which would offer subsidies based on household income instead of the current consumption-based subsidies, Minister of Labor and Social Affairs Péter Kiss announced after Friday's cabinet meeting.

The amended subsidies system will take effect on January 1, 2007, Kiss said. The central budget will pay out Ft 100 billion for the subsidies in 2007. There are no plans to change the retail price of gas next January but the actual prices paid by households will drop in the lowest income category, but rise for other households, Kiss said.
From January, Hungarians will be eligible for four different levels of subsidies up to a monthly income of 3.5 times the subsistence level for pensioners, or up to monthly per-capita household income of Ft 93,905. Those earning more will not receive any subsidy. Some 2 million of the total of 3.8 million Hungarian households will receive gas subsidies, Kiss said.
Under the current system, the first 3,000 cubic meters of gas consumed by a household a year is subsidized, with the first 1,500 cubic meters consumed receiving more subsidy than the second 1,500 cubic meters. Big families and disabled people receive additional subsidies.



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