Hungary considers ditching Russian oil with EU financial help
Hungary may abandon Russian oil if the EU provides financial support for its transition to other suppliers, a director at Hungarian company MOL tells Politico. This move could impact the Russian budget.
11:56 AM EST, November 21, 2024
The Hungarian company MOL, which operates the only refinery importing Russian oil, is ready to diversify its supplies. MOL's Vice President of Strategic Operations, Gyorgy Bacsa, emphasizes that Hungary needs EU financial support to end its dependence on Moscow by 2026.
According to MOL, they need $500 million to adapt the refinery for processing other types of oil, so they expect "several hundred million" euros from the EU.
"We do it at our pace"
MOL also has a refinery in Slovakia. As Bacsa points out, the company receives "zero" financial help because refining does not qualify for EU support.
"We do it at our pace and at what we can afford," he added.
Hungary is one of the few EU countries that can import Russian oil, but the exemption from the ban is temporary. MOL fears the EU will set an end date or take punitive measures.
The company informed Politico that it is concerned that the derogation may end without finding a solution for a long-term competitive oil supply.
MOL has a long-term contract with Lukoil, which expires in 2025. Bacsa notes that the agreement will be renewed if legally possible. Hungary has increased its import of Russian oil, even though other EU countries are reducing purchases. According to experts, Budapest was encouraged by the lower raw material price.
MOL is partly owned by the Hungarian government, which has also imposed several taxes on the company. Therefore, MOL is crucial for the economy as it helps, among other things, to fill budget gaps.
