Hungary Will Request the EU to Extend the Exemption From Sanctions on the Russian Oil
Hungary will appeal to the European Union to extend the exception from sanctions against Russia for one year. This exception allows the Slovnaft oil refinery to export products processed from Russian oil to the Czech Republic.
According to Euractiv, Hungary's Minister of Foreign Affairs, Péter Szijjártó, announced the planned application for sanction relief after a meeting with his Slovak counterpart, Ľudovít Ódor.
The current exemption from sanctions, which ends in December 2023, applies to Slovnaft, an oil refining company in Slovakia owned by the Hungarian group MOL.
Peter Szijjártó stated that Slovnaft has invested 100 million euros to enable its Bratislava refinery to process crude oil from sources other than Russia. However, an additional year is needed to complete the necessary adjustments. Therefore, the Hungarian government will request the European Union to extend the exemption from sanctions for another year.
Additionally, as mentioned by the Hungarian Minister of Foreign Affairs, the Croatian government has significantly increased transit fees on the Croatian transportation route, which serves as an alternative to importing from Russia. The new fees are approximately four times higher than the market price. This places a heavy burden on Hungarian and Slovak oil suppliers and complicates diversification efforts.
"We believe it is unfair for someone to profit from a war situation, especially when it comes to the energy security of other countries," said Péter Szijjártó.
MOL owns oil refineries in Hungary and Slovakia that lack access to the sea. Both refineries receive supplies through the southern branch of the "Druzhba" oil pipeline.
Slovakia currently obtains almost all of its crude oil from Russia but plans to reduce this dependency.
The CEO of MOL, Zsolt Hernádi, stated that the company intends to partially finance technological investments amounting to $500-700 million, necessary for diversifying its Danube-based refineries and Slovnaft in terms of utilizing Urals-grade oil. These funds are expected to come from the European Union.
"We would like to have the freedom to decide at the end of 2025 how much and what type of oil we want to supply to our refineries... by the end of 2025 or the beginning of 2026," added Hernádi.
Last year, non-Russian oil accounted for only about 5% of Slovnaft's oil consumption. This share is expected to increase to 30-35% by the end of this year.
As previously reported by The Gaze, Hungary once again refused to support the allocation of a tranche of approximately €500 million from the European Peace Facility to EU member states. The refusal was due to demands to exclude the Hungarian OTP Bank from the list of "war sponsors," as stated by Hungary's Minister of Foreign Affairs, Péter Szijjártó.
This is not the first time Hungary has employed such tactics to pressure Ukraine and the EU. In May, Budapest blocked the disbursement of this tranche to member countries, citing the same demands.
Hungary is among several EU countries refusing to condemn Russia's aggression in Ukraine and consistently blocking EU assistance to Ukraine. The country remains dependent on energy supplies from Russia, and its government is under direct influence from Moscow.