Hungary demands ‘solution’ to cost of oil sanctions – POLITICO

The Hungarian government has spelled out how much money it would need to make scrapping Russian oil imports viable, as officials in Brussels hammer out financing options to convince Budapest to back a new round of sanctions.

Foreign Minister Péter Szijjártó said Hungary could not support the EU’s proposal to ban all imports of Russian crude and refined fuels without a “solution” to the costs of adjusting its energy supply and its infrastructure.

His comments are the closest Hungary has come to naming his prize for backing the EU’s sixth sanctions package. There is still no guarantee that Budapest will sign or other EU countries will back a deal to provide financial aid to Prime Minister Viktor Orbán’s government.

Hungary has resisted the proposed oil ban, warning that the impact on its economy would be disastrous. Gain the support of Orbán is key to passing the latest sanctions.

In an interview with Spanish newspaper El País, Szijjártó argued that different national energy situations within the EU should be taken into account. Not only is Hungary a landlocked country, but the country also depends on Russian oil and gas due to its historically built infrastructure, he pointed out.

“This Commission proposal creates a huge problem for us,” Szijjártó said. “Our refinery is designed for Russian oil. To refine other types of oil, you would have to invest between 500 and 550 million euros, which would take about four years. To replace the pipeline from Russia, you would have to expand the capacity of the Adriatic Sea gas pipeline, which would be 200 million euros, and we don’t know how long it would take.The price of gas in Hungary would increase by 55%.

Szijjártó stressed that Hungary cannot support the current sanctions package unless Brussels offers a solution. “What we said to the President of the Commission on Monday is that her proposal poses a problem for us. We can only vote for it if a solution is proposed to us.”

He reiterated Hungary’s proposal to exempt deliveries by pipeline from the oil ban and to focus the embargo on deliveries by ship.

Brussels is considering whether to provide Hungary with additional funding via the bloc’s new energy strategy, which will be announced next week. But at a meeting on Wednesday, several EU countries raised concerns about offering compensation to Hungary.

Officials have denied any connection between the oil ban talks and the dispute between the Commission and Budapest over cuts to Hungary’s funding for eroding the bloc’s rule of law standards. Szijjártó also said there was no connection. “If oil is banned, our energy system would have to be completely overhauled, and that would cost money. But that has nothing to do with other issues.”

Sarah Anne Aarup and Zosia Wanat contributed reporting.


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