Hungary says committed to end power monopoly
Hungary is committed to end the near monopoly of state-owned power wholesaler MVM and will draft legislation by the end of April to better regulate the firm.
MVM owns two of the top three Hungarian power generators, the entire grid, controls 75% to 80% of the wholesale market through long-term contracts and controls cross-border capacity. It recently purchased a 10 % stake in electricity retailer Elmü.
Kákosy said the government planned to change regulations to declare MVM a firm with significant market power, which would allow the regulator to more closely control its activities.
Prime Minister Ferenc Gyurcsány asked Finance Minister János Veres last week to fire the MVM's chief executive and draft legislation to end the company's monopoly as it had become overly dominant, resulting in unreasonable price increases for households.
Hungary's central bank recently warned that poorly-crafted energy sector regulation will push up inflation, while the competition office said that under current regulations, competition is unlikely to develop. (Reuters)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.