Hungary continues to insist on the Member State regulation of retail electricity prices. This is supported by a number of other EU Member States, in contrast to Brussels’ view, András Aradszki, State Secretary for energy affairs at the Ministry for National Development said on Monday at a press conference held in Budapest.

The State Secretary takes the view that the Member State regulation of electricity prices relating to retail consumers does not detrimentally affect the market of electricity, and it is not contrary to the treaties and other core documents, including the energy union. He added that there should be competition on the wholesale market, rather than in the case of retail consumers.

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He said that, according to plans, the energy union would phase out the regulation of retail electricity prices by the Member States with reference to the subsidisation of the market, while it would continue to leave responsibility for the supply of electricity with the Member States in the EU.

He added: the Hungarian Government does not agree with this, and several other Member States, such as France and Slovakia, too, spoke up against the drastic and swift phasing out of Member State regulation. He also highlighted that between 2010 and 2015 the price of electricity did not increase for retail consumers only in those EU Member States which regulated prices, and this means that market-based regulation would result in a rise in prices. The retail price of electricity in Hungary is one of the lowest today in Europe, while in the countries dispensing with regulation, prices have increased by 20 per cent on average in recent years, he said.

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The State Secretary pointed out: it also gives rise to concern that Brussels would restrict the right of the Member States to choose their own energy mix as it takes account of low-carbon energy production methods with different weights, and assigns a higher preference to renewable energy than to nuclear.

In answer to a question concerning the European Commission’s Monday decision on the Paks enlargement project, Mr Aradszki said it is legal nonsense that, in the context of the Paks project, the EU earlier took Hungary to task on account of the lack of public procurement proceedings. As regards financing, he said that, according to the Government’s calculations, there will be no need for state aid in connection with the enlargement of the Paks atomic power station.