Breaking the myth: Russian gas costs Hungary more than alternatives
While neighbouring countries have significantly reduced their dependence on Russian energy, Hungary has taken a different approach: but was it worth it?
Hungary’s heavy reliance on Russian gas, rooted in Cold War-era infrastructure, has made the country politically and economically vulnerable. While neighbouring countries have significantly reduced their dependence on Russian energy, Hungary has taken a different approach, maintaining high levels of imports despite the growing evidence that Russian gas is not cheaper than Western alternatives.
Others recognised the problem in time
Hungary’s persistent reliance on Russian gas has increasingly drawn criticism, especially as other Central European countries have successfully diversified their energy sources. According to Piac és Profit, rooted in infrastructure developed during the Cold War, this dependency has exposed Hungary to economic and political risks. While the collapse of the Eastern Bloc left many countries grappling with similar challenges, most have since recognised and mitigated these vulnerabilities.
The Baltic states, for example, began severing ties with Russian energy in 2014, following the annexation of Crimea. Slovakia, too, quickly cut its Russian gas imports by 44% within a year. By contrast, Hungary’s energy strategy has remained heavily dependent on Russian imports, even as Poland and the Czech Republic almost entirely eliminated direct purchases after the outbreak of the war in Ukraine in 2022.
Infrastructure development is key
Countries that moved away from Russian gas achieved this through infrastructure development, such as building LNG terminals, adopting renewable energy sources, and reducing energy-intensive industries. Hungary, however, has chosen a divergent path. The government initially justified this dependence by claiming Russian gas was cheaper, a narrative disproven as prices have climbed higher than those of Western alternatives.
Economic data reveal the consequences of Hungary’s choices. From 2022 to 2024, nations like Poland, the Czech Republic, and Slovakia—all of which reduced their reliance on Russian gas—reported higher GDP growth rates than Hungary. This suggests that moving away from Russian energy need not hinder economic development.
Hungary’s access to needed funds limited
Transitioning away from Russian gas in Hungary would require significant steps, including scaling back energy-intensive industries such as battery production, exemplified by the CATL factory in Debrecen, which consumes more electricity than the entire residential population of its county. Additionally, large-scale investments in infrastructure and energy efficiency are essential.
While the European Union’s REPower program offers support for such initiatives, Hungary’s access to these funds is hindered by ongoing rule-of-law disputes. Without substantial political will, Hungary’s dependence on Russian gas appears set to continue, despite its economic disadvantages and the successful energy transitions of its neighbours.
Read also:
- Cooperation with Russian Gazprom ensures supply and great price for Hungary, foreign minister says in Russia – UPDATE: agreement signed
- POLITICO: The price MOL would accept to abandon Russian oil in Hungary
Featured image: depositphotos.com
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