Hungary to raise gas price

The Hungarian government had decided to raise gas prices by an average of 27% as of Aug. 1, the Economy and Transport Minister János Kóka announced on Wednesday. The price of district heating would go up by 18% from the same date, Kóka added. The price of gas will rise by 25% for residential consumers who use less than 1,500 cubic meters of gas per year, by 30% for those who use 1,500-3,000 cubic meters, and by 37% for consumers using over 3,000 cubic meters a year, according to the Economy Ministry. The increases already included the effect of a 5-percentage point Value-Added Tax (VAT) hike, which was scheduled to kick in as of September, he added. Industrial consumers will pay 12.6% more for gas while institutional consumers such as schools and hospitals will face gas price increases of 17.6%. According to the Welfare Minister Péter Kiss, the government planned to offer gas price subsidies to the country's disadvantaged communities, including kinship families, pensioners and families caring for disabled persons. The compensation will affect 1.1 million people. Meanwhile, the entirely new compensation system is being fine-tuned, with the shift from being consumption-based to needs-based, effective from Feb. 1, 2007. Kóka said Hungary's gas prices would still be far below those in neighbouring Austria, Slovakia and Romania, adding that Hungarians would still be paying only 60% of the global gas price after the price hikes. Péter Szíjjártó, spokesman for the main opposition center-right Fidesz party, said the price hikes would add an average of Ft 40,000 (about $190) to Hungarian families' annual gas bills. (Bg)