Hungary says committed to end power monopoly

Initiatives

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.

The government will also end or renegotiate MVM's long-term power purchase contracts that have impeded competition, and is determined to spin off the power grid and the system operator, Economy Minister Csaba Kákosy told a news conference.

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)

ADVERTISEMENT

Climate change hurts economy, but creates new business oppor... Analysis

Climate change hurts economy, but creates new business oppor...

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Dentons rehires banking and finance partner Appointments

Dentons rehires banking and finance partner

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
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.