“Regulated public electricity prices do not distort the market because universal service providers can move to the competitive market”, the Ministry of National Development’s Minister of State for Energy, András Aradszki said on M1 Hungarian television’s Tuesday evening current affairs program.
“Competition would be impossible if the regulations on entering the market restricted the appearance of new energy suppliers, but not even the Commission has made any observations of this nature”, he explained, adding that Hungary has a market player who provides electricity to consumers under market conditions.
The Minister of State also pointed out that there are countries that, primarily as a result of pressure from the IMF, have already undertaken to terminate the state regulation of energy prices. “Hungary was in a better situation and the IMF could not force it to introduce such changes, but the Commission decided that state regulation must be phased out claiming it is a market distorting factor”, he said.
Mr. Aradszki pointed out that eliminating state-regulated prices has different consequences in Western and Eastern Europe, because wages are much lower in the latter and accordingly higher energy prices would place a much greater burden on household income here. Between 2010 and 2015 the EU itself showed in its impact study that the price of electricity had increased everywhere where consumers bought electricity at market prices, whereas they had fallen everywhere where prices were regulated, he added.
The Minister of State also stressed that regulated prices had caused absolutely no problems with regard to services or for traders operating within the market segment, while electricity importers had found a niche on the so-called free market.