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Hungary: Gas prices to rise 5%

There will be a 5% gas price hike as of January 1, 2008, said Economy Minister János Kóka on Saturday, emphasizing that the extent of the rise is lower than world market developments would dictate.

The ministry said on its homepage that gas prices for other consumers will rise by 4.3%. „The main cause of the change is a continuous rise in crude prices,” it said. The rise in gas prices compares to government expectations for inflation next year of 4.8%. Hungary imports the bulk of its gas, mainly from Russia, and according to its gas purchase agreements its import gas prices follow the changes in crude prices with a nine month delay. Subsidies and regulations keep household gas prices well below world market prices. (Gazdasági Rádió)