Hungary to offset household heating costs amid winter demand

Hungary to offset household heating costs amid winter demand

Hungary: The government of Hungary announced that it will partially reimburse higher household heating costs incurred in January following increased demand during freezing temperatures. The measure is expected to cost 50 billion forints (USD 157.14 million). The government stated that households will receive a 30 percent discount on heating costs, with funding provided through state resources and a levy on energy suppliers. The announcement was made by the chief of staff to Prime Minister Viktor Orban. The measure adjusts the existing system of energy price subsidies, which accounted for an estimated 1 percent of economic output in 2024 and 0.5 percent of economic output in 2025, according to estimates from the European Commission.

The policy decision comes ahead of the April parliamentary election, with Orban’s party, Fidesz, seeking to address domestic cost-of-living concerns. A Eurobarometer survey published in December identified rising living costs as the main domestic issue, despite inflation easing from levels above 25 percent in early 2023 to within the central bank’s target range of 2 to 4 percent by the end of 2025. Hungary continues to meet most of its energy needs through imports from Russia, a position that has drawn criticism from several allies within the European Union and NATO. The European Union has recommended that Hungary reduce its energy subsidy scheme over time.

Source: Reuters