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Szijjarto: Hungary could be given exemption from EU’s oil price cap

It appears that Hungary will be given an exemption from the European Union's planned price cap on Russian oil imports, the minister of foreign affairs and trade said in Brussels on Thursday, adding at the same time that "several dangerous proposals are still on the table".

Under the current plan, the oil price cap would not apply either to pipeline deliveries or deliveries by sea if they became necessary due to unviable pipeline delivery, the foreign ministry cited Peter Szijjarto as saying after a meeting of EU energy affairs ministers. This latter exemption is important given the disruptions to crude deliveries via Ukraine, he said.

If these exemptions were not applied the volume of Russian oil deliveries would drop, causing prices to rise, Szijjarto said.

As regards the European Commission’s other proposals, the minister criticised the solidarity mechanism aimed at avoiding sharp disparities of gas supply across the bloc, calling it “yet more power aspirations on the part of Brussels aimed at eroding the energy-policy sovereignty of member states”.

He said member states had failed to reach agreement on the proposal at the meeting after “a significant number of them” resisted the idea.

Szijjarto said Hungary had helped to ensure that the scheme for joint EU gas purchases would be voluntary, thereby preventing the country from “getting stuck on unfavourable platforms”.

He noted that under the scheme member states would have to notify the EC six weeks in advance of their intention to discuss gas deliveries, “at a time when quick decisions are needed”.

“This is obviously nonsense — madness; we don’t even understand how it could have made it into the proposal,” Szijjarto said.

He also criticised the part of the proposal that would require member states that have enough gas in storage to turn some of it over the countries facing trouble in times of crisis.

“Imagine a situation in which someone from Brussels can order us to turn the gas purchased with the money of the Hungarian people for the Hungarian people and for operating the Hungarian economy … over to another country,” Szijjarto said.

Given that gas prices are higher when storages are being filled up than when the gas is being used, such a proposal would open the door to speculation, he said, arguing that no one would have an interest in buying gas when the storages have to be filled up, which would constitute a risk to energy security.

Szijjarto said member states had also begun talks on imposing price caps on gas imports, but had not reached a decision. The ministers will next meet on Dec. 13 to continue the talks, he added.

Szijjarto called the proposal “dangerous, pointless and inadequate”, saying there was a risk of gas deliveries being withheld from Europe or diverted somewhere else. “Moreover, it does not fall in line with the decision reached at the European Council’s last session,” he added.

Szijjarto said the closing statement issued at the last European Council session declared that the price caps on natural gas would not apply to long-term gas supply agreements. Yet under the latest plan this would not be the case, which the Hungarian government considers “unacceptable”, he said. Hungary will fight to achieve an exemption from the gas price cap as well, Szijjarto added.

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