Hungary aims to cut gas use 25% at public institutions

Hungary aims to cut gas consumption by 25% this heating season at public institutions and companies except for hospitals and social institutions due to surging energy costs, Prime Minister Viktor Orban's chief of staff, Gergely Gulyas, said on Thursday.

Gulyas also urged consumers to use gas and electricity sparingly, adding that the government would regulate firewood prices to ensure households have access to the fuel at affordable prices ahead of the heating season.

"Within the next two weeks, ministries should lay out their plans so that they only consume 75% of last year's (gas) levels," Gulyas told a weekly media briefing.

Gulyas said that could curb Hungary's gas consumption by about 200 million cubic metres of a total 10 billion cubic metres used annually, including 3.5 bcm consumed by households.

"(Total consumption) will decline as industry will start using less on its own, the public sector will be forced to consume less while I think households are also striving to switch to alternative fuels," he said.

The temperature for heating at public administration buildings will be limited to 18 degrees Celsius (64 degrees Fahrenheit), Gulyas said.

He added that the government was working on a scheme to help energy-intensive small businesses save jobs.

A surge in European energy costs has pushed Hungary's foreign trade balance deeply into the red, with a massive 1.15 billion euro ($1.15 billion) shortfall in July as an increase in import bills substantially outpaced export growth.

The volatility in European gas prices has also put pressure on the forint, central Europe's worst-performing currency due to Hungary's high reliance on Russian energy imports and uncertainty over access to European Union funding.

Economists at Hungarian Bankholding estimate that the deterioration in Hungary's terms of trade could push its trade account into a 6 billion to 6.5 billion euro deficit this year from last year's 1.6 billion euro surplus.