Hungary benefits from the oil embargo

Hungary benefits from the oil embargo

Hungary would make a profit of $ 600 million from taxes on Russian oil “to the detriment of everyone else in the EU,” according to a report by a research agency, writes The Guardian.

Currently, Viktor Orban’s government, which can still import Russian oil despite the EU imposing an oil embargo on Russia, recently introduced an exceptional 25% tax on the difference between the price of Russian crude oil and international prices.

And Eurointelligence estimates that this tax could enrich Budapest by almost 600 million euros a year in “hidden profits”, noting that the amount is quite important for “an economy of this size”.

Hungary is one of three EU countries, along with the Czech Republic and Slovakia, that have received a waiver from the Russian oil embargo. After months of negotiations over a new package of sanctions against Russia, EU leaders have decided to ban 90 percent of Russian imports by the end of the year and have vowed to reach an agreement “soon” to complete the embargo. without specifying a specific date.

Concter, the Eurointelligence analysis shows that the Hungarian Prime Minister has little reason to join the embargo on oil imports from Russia. Thus, “For Orban, keeping imports through the pipeline and banning all other things is the best of both worlds,” according to the agency.

In addition, “his government is also benefiting from high oil prices and continued deliveries of Russian crude oil while pocketing some of its revenue, to the detriment of everyone else in the EU,” writes Eurointelligence. “Why would he give up?”

In the financial context, Hungary introduced new taxes affecting energy and airlines this month after the country’s budget reached the red zone due to high pre-election spending by the government.

Specifically, the Hungarian government reported a budget deficit of 7.2 billion dollars for the period January-April, according to Reuters, after the Hungarian Prime Minister reduced taxes and increased pensions before the elections that Orban won for the fourth consecutive times.

Orban blames George Soros for “prolonging” Russia’s war in Ukraine

While European officials were quick to express optimism about the introduction of a total embargo on Russian oil in the near future, Orban took a different tone and said that removing the derogation from Hungary “will not happen too soon and will cost a sum huge amount of money ”.

In addition, Orban accused the EU and philanthropist George Soros of “prolonging” Russia’s war in Ukraine.

“It is now clear that there are business circles that have an interest in war and are symbolized by George Soros,” Orban said without providing evidence.

Therefore, the Orban government has not yet commented on the data published by Eurointelligence, but said that the producers of oil products must pay the exceptional tax of 25% for the fiscal years 2022 and 2023.