Amateur mistake by Kapitány István: Shared business secret on Facebook

Energy lawyer Máté Tóth has publicly corrected Kapitány István regarding Hungary's gas procurement strategy, emphasizing that gas prices themselves cannot be fixed. Tóth explained on social media that while price risks can be hedged, the physical acquisition of gas and financial hedging are distinct transactions. He clarified that hedging is managed through financial instruments like futures, forwards, swaps, or options. Tóth's comments were a response to claims suggesting that Hungary's MVM (Hungarian Electricity Ltd.) had secured gas at fixed prices. He asserted that during the previous government's tenure, MVM purchased and paid for long-term contract quantities, filled storage facilities, and hedged price risks at low global market prices at the beginning of the year. Furthermore, MVM had initiated these hedging transactions even for quantities beyond 2027. Tóth stressed that securing physical gas supply and hedging against future price risks are separate matters, implying Kapitány's statement was inaccurate. Meanwhile, Europe appears to be heading towards another gas crisis. EU gas storage levels are significantly below those of previous years, and prices are rising again. This situation is compounded by the gradual reduction of Russian gas supplies and uncertainties surrounding the conflict in the Middle East. While the Hungarian government assures that supply is secure, the real question remains the price and terms under which Hungary will secure its necessary natural gas supply from 2027 onwards.

“

The price of gas cannot be fixed. Price risk can be hedged, but the physical procurement of gas and the financial hedging transaction are two separate transactions; the latter can be managed with futures, forward, swap, or option transactions.