The utility cost reduction programme was a success: in 2013 and 2014 the programme secured savings worth 334 billion forints for some 3.8 million households – the Ministry of National Development’s Minister of State for Parliamentary Affairs, János Fónagy declared at a Monday press briefing.
The cost reduction programme will result in an additional 240 billion forints in savings for families in 2015, he added.
According to his summary, the Government had successfully reduced the price of natural gas by a total of 25%, electricity prices by 24.5% and district heating costs by 22.6%.
Hungarians currently pay the second lowest prices for natural gas and electricity within the European Union, Mr. Fónagy emphasised. “The utility cost reduction programme has been a success; it stands as testimony to the success and soundness of Hungarian reforms and Hungarian solutions”, the Minister of State declared.
Mr. Fónagy pointed out that the HUF 334 billion (EUR 1.1bn) in savings secured for families has improved consumption rates and also fundamentally contributed to enabling the results of Hungarian reforms and the Government’s consumption-related economic achievements to become apparent in people’s everyday lives.
Among the other successes achieved by the reduction in utility prices, the Minister of State also pointed out that the level of outstanding utility payments exceeding 30 days payable to natural gas, electricity and district heating service providers fell by an extremely significant 45% between January 2013 and December 2014. The number of consumers in arrears also decreased considerably to 930 thousand from the previous 1.5 million. The level of outstanding payments owed to service providers was reduced by a further 12 billion forints between May 2014 and May 2015, Mr. Fónagy explained.
The Minister of State reminded the press that during the spring-summer period of 2010, Hungary was regarded (in economic and financial matters) as being in the same group with Greece and other Mediterranean states: the country was heavily in debt, inflation rates were high and unemployment rates had reached unprecedented heights; Hungary’s reputation was at an all-time low from every perspective. The Government understood that Hungarian families were in a day-to-day financial struggle and the population was paying one of the highest utility rates in Europe, a fact that had to be changed. Families spent a quarter of their income on these costs and expenses, half in the case of poorer families. The government of the period found only one solution: the freezing of utility charges. Then in 2011, significant measures were introduced and further limits were imposed on the increasing of utility charges, which at the time already led to a reduction of several tens of thousands of forints in family utility expenditure, Mr. Fónagy recalled. The truly comprehensive solution was found in December 2012, when initially electricity, natural gas and district heating charges and subsequently water, sewage and waste management charges were significantly reduced in several steps, the Minister of State pointed out.