Household gas prices rose an average 27% under a government decree which took effect on Tuesday.
Still, Hungarians pay only about 60% of the global market price of gas, Miklós Hegedűs, who heads GKI Energy Research and Consulting, said on Tuesday. Hegedűs said the rise in prices would not affect consumption in the short term, but the effects of the rise would show up in two or three years. The 1%-1.5% annual rise in household gas consumption seen over the past several years will probably slow, and more households, especially in the countryside, will seek alternatives to gas.
From August 1, the price of district heating increased 18% and the price of electricity rose 14.5%. The consumer price of natural gas rose 25% for households using less than 1,500 cubic meters per year, 30% for those consuming between 1,500 and 3,000 cubic meters, and 37% for consumers using more than 3,000 cubic meters. The increases include the effect of a 5-percentage-point VAT rise on gas effective from September 1. Industrial consumers will have to pay 12.6% more and institutional consumers 17.6% more, including the VAT raise, for gas from August 1.
The government has spent Ft 105 billion so far this year on subsidizing gas prices. Last year, Ft 76 billion was spent for this purpose, well over the budgeted Ft 45 billion. More than half of households use less than 1,500 cubic meters of gas a year. These households account for about two-thirds of government spending on price subsidies. One-third of households use 1,500-3,000 cubic meters annually, and 14%-15% of households use more than 3,000 cubic meters of gas a year.