EU state warns of impending fuel shortage

Hungary risks depleting its reserves due to an oil transit spat with Ukraine, a top official has said

Hungary will face a fuel shortage by September if a solution to the oil transit dispute with Ukraine is not found, Gergely Gulyas, the head of the Hungarian prime minister’s office, has warned.

Kiev stopped the transit of crude from major Russian oil supplier Lukoil through the Druzhba pipeline to its neighbors Hungary and Slovakia last week, citing sanctions against the Russian energy giant. The restrictions effectively prohibited Lukoil from using Ukraine’s territory as a transit route.

Hungary’s largest oil refinery, which is located near Budapest, cannot quickly switch to processing non-Russian crude, so the country risks depleting its fuel reserves, Gulyas explained.

“If the situation is not resolved, there may be a fuel shortage, a solution for this must be found by September,” the newspaper Magyar Nemzet quoted Gulyas as telling reporters on Friday.

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By blocking the deliveries Kiev appears to be “blackmailing” Budapest and Bratislava because of their consistent demands for a ceasefire and peace, the minister said.

Lukoil accounted for about a third of Hungary’s total annual oil imports, Foreign Minister Peter Szijjarto said earlier this week.

Hungary and Slovakia are the only EU members that are opposed to the bloc’s policy of providing military aid to Ukraine in its conflict with Russia and have repeatedly called for a diplomatic solution to the crisis.

The EU prohibited transport of Russian crude oil by sea in December 2022 as part of far-reaching sanctions on Moscow. However, two landlocked states were granted exemptions to ensure their energy security.

Following last week’s suspension of supplies, Budapest and Bratislava asked the European Commission to mediate with Kiev over the situation.

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If EU consultations don’t work, the Hungarian government “reserves the right to take further action,” said the country’s EU affairs minister, Janos Boka, who was also present at the press conference in Budapest.

“There is no reason to panic so far because reserves are high,” Bloomberg quoted Gulyas as saying. “The problem isn’t immediate, but we must find a solution by September,” he added.