Hungary Faces Potential Fuel Shortage if Oil Transit Dispute with Ukraine Not Resolved.
Hungary is on the brink of experiencing a fuel shortage in September, as warned by Gergely Gulyas, head of the Hungarian prime minister’s office. This situation arises due to an ongoing dispute over oil transit between Hungary and its neighbor, Ukraine. If no solution is found, the consequences could be severe for the country’s energy security.
The issue began last week when Kiev ceased the transit of crude oil supplied by Russian firm Lukoil through the Druzhba pipeline to Hungary and Slovakia. This move came as a response to sanctions imposed against the Russian energy giant, effectively barring Lukoil from using Ukraine’s territory as a transit route.
The largest oil refinery in Hungary, which is situated near Budapest, cannot readily switch to processing non-Russian crude. Consequently, if no solution is found by September, Hungary may face a depletion of its fuel reserves. As quoted by the newspaper Magyar Nemzet, Gulyas said on Friday: “If the situation is not resolved, there may be a fuel shortage; a solution for this must be found by September.
Ukraine’s decision to halt deliveries appears to be a form of “blackmail” against Budapest and Bratislava due to their consistent demands for a ceasefire and peace, according to the minister. Lukoil accounted for approximately one-third of Hungary’s total annual oil imports, as stated by Foreign Minister Peter Szijjarto earlier this week.
Both Hungary and Slovakia are unique among EU members in their opposition to the bloc’s policy of providing military aid to Ukraine in its conflict with Russia. These two nations have repeatedly called for a diplomatic solution to the crisis. In December 2022, as part of extensive sanctions on Moscow, the EU prohibited transporting Russian crude oil by sea. However, Hungary and Slovakia were granted exemptions to safeguard their energy security.
In light of last week’s suspension of supplies, Budapest and Bratislava have requested the European Commission to mediate with Kiev over the situation. If EU consultations fail, Hungarian government officials “reserve the right to take further action,” as stated by the country’s EU affairs minister, Janos Boka, who attended a press conference in Budapest.
Gulyas reassured that there is no reason to panic currently since fuel reserves are still high. However, he emphasized that it is crucial to find a solution by September. The ongoing dispute between Hungary and Ukraine has raised concerns about the potential consequences for the country’s energy security if no resolution is reached soon.