In 2022, after Russia began its full-scale invasion of Ukraine, the European Union urged member states to wean themselves away from Russian energy imports.
Hungary dragged its feet on the issue; Prime Minister Viktor Orbán and Minister of Foreign Affairs and Trade Péter Szijjártó repeatedly argued that landlocked Hungary is both economically and physically dependent on Russian energy imports because of its pipeline connections.
MOL, the Hungarian oil and gas company (which, though listed, is effectively controlled by the government), insisted that switching its key refineries to process crude oil other than the Russian Ural blend would take time and require an investment of some USD 500 million.
The dispute came to a head after the European Commission announced plans last year to ban Union member states from importing Russian oil and gas by late 2027 at the latest.
Foreign minister Szijjártó, speaking in St. Petersburg after talks with Russian government officials and energy companies last June, was unequivocal in his stance.
Russia was able and willing to provide Hungary with cheap natural gas and crude oil, he said. Without this, he warned, “utility prices in Hungary would multiply two to three times” if the plan to ban Russian fossil fuel imports were to be approved, the Hungarian government website reported.
Szijjártó continued that Hungary would not allow Brussels or Kyiv “to interfere” in its sovereignty.
A day later, speaking in Bratislava after meeting his Slovak counterpart, Szijjártó denounced what he termed the “von der Leyen-Zelensky plan” for failing to take into account that the pipeline system in Central Europe meant that, without Russian imports, the energy supplies of both countries were at risk.
“We are not willing to allow Brussels make Hungarian families pay for the price of providing further support to Kyiv,” he said.
The claim has been repeated by government officials ever since, with Hungary now promising to sue the EU after the European Parliament passed the proposals on Dec. 3, meaning the ban will become formally binding early this year.
However, Attila Holoda, managing director of Aurora Energy, Budapest, insists that many of the government’s claims are misleading or outright false.
“There is a big and long-lasting fairy tale in Hungary that Russian gas is cheap: Russian gas is not cheap. Russian gas [purchased via] the long-term contract is the same price as the TTF,” he said, referring to the Dutch exchange market price, the benchmark for Europe.
Speaking to foreign correspondents in mid-December, Holoda added: “In the long-term contract with Russian Gazprom, they also included that the price formula depends on the TTF’s previous month’s average weighted price. This means that if the price goes up in the TTF, the Russian gas price [does] the same.”
Holoda, who spent almost 25 years with MOL, including time as head of the Hungarian gas storage facilities, the gas processing plant, and all the oil and gas fields in Hungary, is also dismissive of concerns that Hungary is physically dependent on Russian pipelines.
He cited Károly Mátrai, chief executive of MVM, which imports gas into Hungary, as saying in early December that the company could supply domestic gas demand without Russian imports (as reported by international news wire Reuters on Dec. 5).
“So, this contradicts politicians like Mr. Szijjarto, who is always saying that this is not a simple political or theoretical question; it is a physical connection. This is not true. If we take into consideration the physical connections, you can see that since [the communist era] we have connected to all our neighboring countries, except Slovenia,” he pointed out.
As for oil, Holoda indicated that MOL’s claim that its refineries were restricted to processing the Russian Ural blend was, at best, misleading.
“Every refinery can receive every kind of crude oil,” he said, albeit he accepted that the best efficiency depended on how the refinery was configured to match the characteristics of the crude input. Crucially, MOL’s two refineries are both of a very high technical standard.
“If you read the annual report of the MOL Group, they very proudly state that the Nelson Complexity Index for the refineries at Százhalombatta and Bratislava are around 10. It means they are very efficient and can receive any kind of crude oil,” Holoda said.
Then comes the question of pipeline capacity. MOL imports crude via the Druzhba pipeline from Russia, and can also import crude from Croatia via the Adria pipeline. However, it claims that in tests last September, Janaf, the Croatian pipeline owner, was unable to operate the system at full capacity for more than one hour.
This would make the Adria incapable of delivering the 14 million tonnes of crude MOL says it needs to supply its refineries annually.
Janaf responded angrily, accusing MOL of lying and wanting to continue importing cheap Russian oil on which it can make handsome profits.
Asked for comment, Holoda declined to support either side, saying only that the Adria had never operated continuously at the highest volume, so tests were clearly needed, if necessary with independent experts to verify the conclusions.
However, in February 2015, the MOL group stated Hungary could import more than 15 million tonnes per year via the Adria, more than enough for its two refineries, especially since Hungary itself produces one million tonnes from domestic wells.
Asked why, if Hungary could supply both its gas and oil needs from other sources at similar costs, it continues to buy from Russia when it can, Holoda replied: “This is not an energy question. I would say this is more a political or a moral question.”
Costs and security of supply are contentious subjects in many countries, none more so than in those states formerly (and firmly) under Soviet influence, as Hungary was until 1990.
The reasons were straightforward: the USSR had vast reserves of natural gas and crude oil. In the years after World War 2, for both political and economic reasons, Moscow supported the construction of pipelines to supply oil and gas to its Eastern European satellite states.
This energy, especially after the 1973-74 global oil crisis, was supplied at artificially low prices compared to Western norms. While enabling cheaper utility prices, this also supported the creation of inefficient industries, home heating systems and motor vehicles.
The model proved untenable in the long term, as the collapse of the communist system vividly illustrated. In October 1990, Hungary was brought to a stand still by taxi drivers blocking roads in a mass protest over spiraling fuel prices until negotiations produced a compromise.
The shock of that action is still felt today: governments of all colors have trodden warily when it comes to fuel and utility prices, none more so than the administrations led by Prime Minister Viktor Orbán since 2010. His rezsicsökkentés (“utility price control”) policies enforcing price caps on the retail prices of gas and electricity, and later motor fuels, are considered a major reason for his successive electoral victories by analysts of all persuasions.
This article was first published in the Budapest Business Journal print issue of January 16, 2026.
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