Hungary to cut gas subsidy further in 2008: Report

Analysis

Hungary plans to cut the amount earmarked in the budget for natural gas price subsidies in 2008, a daily reported on Saturday, quoting government sources.

Hungary already cut subsidies sharply last year as part of its program to reduce the budget deficit from over 9% last year to 3% required to adopt the euro. The government wants to cut the money available for gas subsidies - paid based on income - to Ft 82 billion ($469.1 million) in 2008 from 120 billion this year, Népszava said. Government spokesman Dávid Daróczi said he could not comment on the report because the government first wanted to inform the coalition parties. “That will happen on Monday,” he said.

Népszava said the government still wants to raise subsidies for the poorest families in line with rising gas prices, but it would not compensate higher earners for any increase. Gas price hikes have weighed on Hungary's inflation this year as the government raised household prices by around 40% for most users in the Q1 after implementing an increase of around 30% just months earlier. (economictimes.indiatimes)

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