Perspectives

January 9, 2009
Hungary running on reserves as gas dispute continues

A gas station in Budapest.

Russia’s dispute with Ukraine over gas prices has impacted other European nations whose gas shipments pass through Ukraine. Hungarian imports from Russia were down more than 20 percent on Tuesday, but the country still has more gas than others cut off in the dispute — Hungary plans to deliver gas to Serbia, which has no gas reserves.

Gazprom, a state-controlled Russian energy company and the world’s largest producer of natural gas, reduced gas supplies to Ukraine after accusing the country of stealing 65.3 million cubic meters of gas since Jan. 1.

Eva S. Balogh is a Hungarian academic and blogger who writes at “Hungarian Spectrum” about her country’s position in the gas dispute. 

Crisis after crisis: now it is gas

There is a Hungarian slang expression: “there is gas” (gáz van). It means there is big trouble. The big trouble now is that there is no gas. That is, there is no gas coming from Russia via Ukraine. Of course, the trouble would be greater if Hungary didn’t have enough reserves to survive for at least two more months. Other countries–Bulgaria, Slovakia, and Serbia, for example–are in much bigger trouble because they have practically no reserves. Serbia already turned to Hungary yesterday for help. The initial Hungarian answer was negative, but by today the Hungarian government decided that after all it could spare a couple of billion m³ of gas because yesterday Hungarian consumption was lower than expected. Also Hungary has some natural gas of its own and a smaller amount reaches the country from Austria as well. Thus while Bulgaria and Slovakia are entirely dependent on Russian gas, Hungary relies on Russian gas for somewhere between 50% and 75% of its needs. Today, for example, 4 billion m³ gas arrived from Austria. The problem is that countries in Eastern Europe that depend on Russian gas can’t really help each other because there are no pipelines between Romania and Bulgaria, or Hungary and Slovakia, or Romania and Hungary.

No one knows what the real situation is between the warring business partners, Russia and Ukraine. If one can believe the Russian ambassador to Hungary, there are four “faucets” that can be turned on or off. Three of these were shut off by Ukraine yesterday morning and only then did Russia move to shut off the one remaining “faucet.” The Ukrainians’ version of events, not surprisingly, is different. They claim that they would be most willing to send on any natural gas that arrives in their pipelines. But there is none. The Russians have shut off the flow of gas.

Then there are the two entirely different interpretations of the Russian-Ukrainian feud. There are those who claim that it is simply a business quarrel while others think that it is fundamentally a political issue. Russia is putting economic pressure on Ukraine to keep it within the fold. Ukraine, on the other hand, is looking westward; it wants to belong to NATO and eventually to the European Union. A Hungarian political scientist currently in Kiev views the crisis solely in political terms, a manifestation of Russia’s imperial aspirations. Even the Russian ambassador to Hungary admitted that Russia is unhappy with Ukrainian political ambitions. I’m inclined to think that Russia’s dispute with Ukraine is not solely economic. Russia’s loss of Ukraine must still be hard to swallow. After all, with the exception of a very brief period after World War I when Ukraine became independent, it was an integral part of Russia for over three centuries. Also there is a huge Russian population within Ukraine’s borders.

To read more, see the original post.

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Photo courtesy of Flickr user zsoolt under a Creative Commons license.

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