Are you sure?

Gov't mitigates effect of price freeze on gas companies

The government has raised the amount of cheaper gas delivered across the border with Austria that Hungarian companies supplying households may import, thus mitigating the effect of a price freeze, the National Development Ministry's press department said when asked by MTI.

The gas delivered from Austria will cover about 80% of expected demand from households, small consumers and district heating companies in the third quarter of 2010. The gas is priced on Western European energy exchanges, where low demand has created oversupply and lower prices, unlike gas imported across Hungary's eastern border, the price of which is set in long-term contracts and linked to oil prices and exchange rates.

The construction allows gas companies that supply households to avoid losses without raising retail prices or using state resources, the ministry said.

The ministry did not name any gas companies in the statement, but the companies affected are likely to be E.ON Földgáz Trade and Tigáz. (MTI – Econews)