Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, gave a commentary to Business FM on Hungary's position regarding the introduction of the EU oil embargo against Russia.
The sixth package of sanctions requires the unanimous approval of all EU member states. But Hungary remains the main opponent of the fuel embargo. Foreign Minister Peter Szijjarto said today that the European Union must offer Budapest billions of euros if it wants the country to agree to support the sanctions. According to him, we are talking about 15-18 billion euros. Previously, the same Szijjarto demanded only 750 million euros.
Alexey Gromov comments:
“The main thing that the European Union must do in order for Hungary to agree to an oil embargo is, in fact, to provide Hungary with alternative opportunities not only to obtain oil, but also to load Hungarian oil refineries. It's no secret that the Hungarian oil refining industry is focused exclusively on Russian oil. There, 85%, and maybe even 90% in some months falls on Russian oil. Plus, an additional problem for Hungary is not only its developed oil refining industry, which immediately loses crude and, in fact, is doomed to close without the support of the European Union, but also, of course, the difficulties in delivering alternative oil to Hungarian enterprises, because Hungary is deprived of access to the sea and, accordingly, it receives the bulk of its oil through a pipe from Russia. Therefore, the position of Hungary is primarily for economic reasons, because joining the embargo can cost Hungary an entire industry. Another thing is that, as I understand it, all the bargaining is around the amount of compensation and the timing of Hungary's transition to a full-fledged oil embargo. Whether the European Union will agree to these conditions is a question, I think that these will not be easy negotiations, because everyone understands that giving Hungary such preferences is a problem. Firstly, these are serious expenses from the budget of the European Union. Secondly, this is a bad example for other countries, which may also request some additional preferences.”
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