Hungarian Gas Market Trends in a Risky and Unpredictable Environment:
A Comparison of the Situation before and after Russia’s 2022 Invasion of Ukraine
Economic Studies (Ikonomicheski Izsledvania), Vol. 33(8), pp. 167-189
Abstract
Russia’s invasion of Ukraine in February 2022 has had a profound impact on the European and thus Hungarian natural gas market, though substantial changes had begun to occur in Europe from 2021, as evidenced by the wholesale price surges for natural gas that year. This paper examines (1) the demand- and supply-side developments in the Hungarian natural gas market before and after the outbreak of Russia’s war on Ukraine; (2) how the Hungarian government has intervened in the natural gas sector from February 2022 onwards; and (3) how these measures fit in with pre-war Hungarian energy strategy documents and the energy policies carried out. Secondary analysis of related statistics is combined with documentary analysis of relevant materials. We find that Hungary did not believe it could wean itself off Russian gas, and thus enhanced cooperation with Russia and bought even more Russian gas. There have been only small steps towards gas import source diversification, and quite late, with priority given to affordability. Demand-side measures, prompted by supply and financial constraints, proved to be relatively successful.
Keywords: energy crisis; natural gas demand and supply; Hungary; Russia–Ukraine war
JEL Codes: L71; L95; O13; P28; Q41
