Hungarian Energy Prices in an OECD Comparison
Keywords:electricity, Hungary, natural gas, price control, utility cost reduction
The goal of the study is to assess the effect of the utility cost reductions announced by the Hungarian government in 2012 on Hungarian energy prices. The effects are discussed in an OECD comparison. It is concluded that the government price control has resulted in a 15% steeper price reduction occurring 5-7 quarters earlier, compared to other OECD countries. The price reductions saved around 202 billion HUF for Hungarian households in 2014, which was around 0.63% of the GDP. If prices are compared to the monthly average wages however, household energy prices are still high in Hungary. One of the costs of the reduction in household energy prices was an increase in energy prices for industry: the industry/household price ratio is highest among OECD countries in the case of natural gas, and third highest for electricity.
BARNES, R., BOSWORTH, R. (2015): LNG is linking regional natural gas markets: Evidence from the gravity model.Energy Economics, 47, 11-17. http://dx.doi.org/ 10.1016/j.eneco.2014.10.004.
DUANGNATE, K., MJELDE, J. W., & BESSLER, D. A. (2015): Price Dynamics under Structural Changes with Unknown Break Points among North America Natural Gas Spot Markets. AAEA & WAEA Joint Annual Meeting, 26-28 July 2015, San Francisco, no. 205661.
EC (European Commission), (2014): Progress towards completing the Internal Energy Market. Country Reports: Hungary, https://ec.europa.eu/energy/sites/ener/files/documents/2014_countryreports_hungary.pdf
HORVÁTH, K.Á. (2014): The Effect of Energy Prices on Competitiveness of Energy-Intensive Industries in the EU (chapter 9). In: Gubik, A.S. & Wach, K. (eds), International Entrepreneurship and Corporate Growth in Visegrad Countries. Mickolc: University of Miskolc, pp. 129-146.
HUBBERT, M. K. (1949): Energy from fossil fuels, Science, vol. 109., nr. 2823. sz., pp. 103-109. HVG (2015): Kapitulál az Orbán-kormány a rezsiharcban? (Does the Orbangovernment capitulate in the utility cost reduction battle?), accessed 1 June 2016, http://hvg.hu/gazdasag/20150615_Az_Orbankormany_kapitulal_a_rezsiharcban
INDEX (2012): Döntött a kormány, csökkentik a rezsiköltséget (The government has decided to reduce the utility costs), accessed 1 June 2016, http://index.hu/gazdasag/2012/12/06/dontott_a_kormany_csokkentik_a_rezsikoltseget/
MAGYAR NEMZET (2014): Orbán: Magyarországon legyen a legolcsóbb az energiaár (Orban: Hungary should have the lowest energy prices), accessed 1 June 2016, http://mno.hu/parlamenti_valasztas_2014/orban-magyarorszagon-legyen-a-legolcsobb-az-energiaar-1216684
SORRELL, S., MILLER, R., BENTLEY, R,. &SPEIRS, J. (2010): Oil futures: A comparison of global supply forecasts. Energy Policy, 38( 9), 4990–5003.http://dx.doi.org/10.1016/j.enpol.2010.04.020
DATA SOURCES EIA:
US Energy Information Agency database: http://www.eia.gov
EPURA: Energy consumption statistics provided by the Hungarian Energy and Public Utility Regulatory Authority: http://www.mekh.hu
HCSO: STADAT database of the Hungarian Central Statistics Office: https://www.ksh.hu/stadat
IEA: Energy prices and taxes database compiled by the International Energy Agency: http://dx.doi.org/10.1787/eneprice-data-en ű
MNB: Hungarian National Bank‟s exchange rate database: http://www.mnb.hu
OECD: OECD database: http://dx.doi.org/10.1787/data-00285-en
WB: World Banks‟s Commodity Markets database: http://go.worldbank.org/4ROCCIEQ50