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MOL chairman says short-term political

decisions drive business policy in Hungary

HUNGARY CHAIRMAN-CEO of Hungarian oil and gas will drain financing resources for investments
giant MOL Zsolt Hernadi criticised the govern- and the consequences will be felt in 5-10 years.
The two countries are ment’s response to the energy crisis at a confer- Short-term political interests are driving
looking to bring Caspian ence on October 20, saying the windfall taxes economic decisions with long-term impacts
gas to Romania in LNG will hurt investment and that state interventions and recent measures such as price caps or extra
form. will be costly. taxes show that “the economy is managed from
Hernadi started out his presentation at the the backrooms of government”, according to
Budapest Economic Forum 2022 with a quote Hernadi.
from Mike Tyson saying “everyone has a plan Political decisions will be shaping global eco-
until they get punched in the mouth” referring nomic developments as well, Hernadi said, refer-
to uncertainties in business planning after the ring to the policy of sanctions by Europe and the
government introduced windfall taxes in the United States.
summer and price regulations to rein in the The era of cheap energy is over, the world
budget deficit. is heading toward a bipolar world order led by
MOL accounts for some 30% of total pro- China and US and in this global game Russia is
ceeds from the windfall taxes, some HUF240bn drifting toward China which will have serious
(€581mn) based on the HUF800bn targeted by consequences.
the government. Including fuel price caps this Europe has been dependent on Russian
ratio goes up to 50%, he added. The government energy for too long and after the sanctions it
froze retail and wholesale fuel prices at HUF480 needs to find alternative sources for 39% of nat-
per litre a year ago, which has led to supply ural gas, 27% of oil and 10% of its gasoline needs.
crunches as demand continued to rise. The price Europe will face supply problems next winter,
freeze also meant huge losses for small petrol sta- he said. To ensure energy security, there must be
tion operators accounting for a third of the fuel enough and affordable energy, countries must
network. spend heavily to minimise dependence on Rus-
“We need to know if these are temporary solu- sian energy sources and continue the green tran-
tions,” Hernadi said, adding that the measures sition. ™

P10 www. NEWSBASE .com Week 42 20•October•2022