Hungarian government caps energy fee price element of electricity prices in select sectors


On 19 June 2023, Hungarian government adopted a new government decree establishing a cap of EUR 200/MWh on the energy fee price element of the electricity price to be applied between 1 July to 2023 and 31 December 2023 for fixed-priced electricity supply contracts concluded by electricity traders and certain entities. The new legislation is a response to current unreasonably high prices in electricity markets, which are causing significant losses in the national economy.

Beneficiaries of the capped electricity price

Non-natural persons and private entrepreneurs in the following registered activities as of 1 June 2023 will benefit from the capped price:

  • manufacturing;
  • accommodation; or
  • warehousing and support activities for transportation.

Fixed-priced contracts are defined as those electricity supply contracts in force on 1 June 2023 in which the energy fee price element of the electricity price is determined by a non-price-indexed formula; or the energy fee price element of the electricity price was determined on 1 June 2023 by a non-price indexed formula in accordance with the price fixing option provided individually by the electricity supply contract, instead of the price-indexed formula generally applicable under the supply contract.

Provisions on capped electricity price

The capped energy fee part of the electricity price to be invoiced by the electricity trader to the customer is a maximum net price of EUR 200 per MWh, excluding the following price elements:

  • incentives for the supply of electricity at discounted prices;
  • cogeneration restructuring fee; and
  • financial contribution to the maintenance of the renewable support scheme.

These price elements and VAT are payable by the customer in addition to the capped price.

For those electricity supply contracts that set the energy fee price element in currencies other than EUR, the central rates of the Hungarian National Bank as of 1 June 2023 will be applied to calculate the energy fee.

The price cap will be in effect between 1 July 2023 and 31 December 2023.

Impact of the regulation on electricity traders

The Hungarian State will reimburse the electricity traders for the  positive difference between the fixed price determined by the electricity supply contract and the capped price. The method of reimbursement will be specified in a separate decree still to be adopted.

This article is co-authored by Rebeka Erdősi.