Once the elections are won, the Hungarians are likely to toast. Since 2013, Viktor Orbán’s fellow citizens have enjoyed some of the cheapest gas and electricity bills in Europe, thanks to a strict supervision of energy price baptized “rezsicsökkentés”. A political totem for the Prime Minister, which allowed him to be re-elected in 2014, 2018 and April 2022.
But on July 13, the Hungarian government decided to review this policy: from now on, price controls only apply up to 210 kilowatt hours of electricity and 144 cubic meters of gas per month. Beyond that, households pay double per kilowatt hour and seven times more per cubic meter… Energy panic is sweeping the country.
Razzia on the logs
Faced with the fear of skyrocketing gas and electricity costs, Hungarians are rushing to wood. In the sawmill of Tura, a municipality in the Budapest region, the waiting lists are overflowing and the customers are even carrying wet logs, which are much more difficult to light. Shortage obliges, another sawmill in the region of Nógrád, in the north of the country, reserves the wood for local buyers.
In recent weeks, Hungarians have been snapping up stoves and fireplaces, like those from Warnex-Global. In its showroom in Törökbálint, near Budapest, customers have been flocking since the restriction of the energy price freeze. “For the time being, we plan to block the thermostat at 18/19 degrees, to cover more and to buy an electric radiator to heat certain rooms if necessary, confides Réka, a young thirty-year-old who has just bought a house with his spouse. The bills will be higher this winter, but we will get used to the new system.”
Strangled by rising rents, commodity prices and energy bills, businesses already weakened by the pandemic and inflation are lowering the curtain one after the other. Nikolett and Beatrix, twin hairdressers in Budapest, left their salon in the 11th district reluctantly. They continue their activity in their home village, Baracska, half an hour away by car. “We cut the air conditioning this summer and increased our prices to cover expenses and keep a little margin, but we could no longer follow financially, hence our departure”, testifies Nikolett.
The crisis is hitting the hotel and catering industry hard, with 30 to 50% of establishments at risk of going out of business, according to one of the main industry federations. Half of the country’s baths, which attract Hungarian and foreign tourists, could hibernate this fall and then this winter, due to rising energy costs. The Budapest thermal baths will remain accessible this winter, but are already inflating their prices to survive: since September 10, entry to the Széchenyi, Rudas and Gellért baths costs 15% more on weekends.
Strangled small towns
Deprived of energy price controls, the municipalities are feeling the pinch. Balassagyarmat, a town on the Slovakian border, has just received a gas quote sixteen times higher than before. “If we accept it, supplying the retirement home, the library, the municipal hall, the town hall and the kindergarten will lead to an annual overload of 360 million gross forints [900 000 euros], points out the mayor Gabor Csach, yet labeled Fidesz, the party of Viktor Orbán. We will try to maintain our services on a limited basis until the end of the year but, even so, government assistance will be necessary.”
In the municipality of Nagyatád, close to the Croatian border, the museum, the art gallery, the community center, the sports hall, the youth club and two of the four hotels in the village will close for the entire cold season. A third hotel is filing for bankruptcy and the library will only open one day a week. At the primary school in Gyorszentiván, a district in the northeast of the city of Gyor, lessons will be held every Saturday this autumn in order to extend the winter holidays and thus save heating.
During the campaign for the April legislative elections, Viktor Orbán had promised that he would maintain the control of energy prices at all costs, in particular thanks to deliveries of Russian gas. The opposition had promised to cut itself off from this dependence on Moscow. Melinda, a teacher in Budapest, summarizes the general panic since the about-face of the executive: “The work is increasing in our neighborhood. People are installing solar panels, installing pellet stoves, renovating their roofs or changing all their Windows.” In Hungary, the specter of a “winter of discontent” is already looming over the government.