Hungary prepares crisis legislation in the event of an oil supply disruption

Background: As reported at the end of October, the government is introducing a new crisis management mechanism to ensure the security of the fuel supply. According to the draft legislation,

a network of designated 'standby filling stations' would supply organisations that are essential for the country to function in a crisis,

such as ambulances, the armed forces and public utility companies.

Current development: On Monday, the draft government decree on the operation of emergency fuel filling stations was submitted for public consultation. This revealed which stations can be designated as emergency filling stations.

Deputy Prime Minister Zsolt Semjén submitted a bill amending the 2013 Act on the Security Stockpiling of Imported Crude Oil and Petroleum Products to László Kövér, the Speaker of the National Assembly.

The following provisions, amendments and additions may be added to the relevant sections of the previous law, among others:

• A crisis situation in the supply of crude oil and petroleum products shall be deemed to exist when:

  (i) the decline in imports relative to domestic consumption reaches 7%,

  and (ii) domestic demand can only be met from security stocks of crude oil, and (iii) the European Union or the International Energy Agency orders crisis measures.
• A serious supply disruption shall be deemed a significant and sudden decrease in the supply of crude oil or petroleum products to the European Union or a Member State. This applies regardless of whether an international decision has been made to release emergency oil stocks.
• The government shall designate standby filling stations based on the Hungarian Hydrocarbon Stockpiling Association's (HUSA or MSZKSZ in Hungarian) recommendations. The government shall also determine the list of standby filling stations and the conditions for classifying fuel filling stations as such in a government decree.
• The government may determine the duration of the order for a maximum period specified in the relevant law. The minister may determine the duration of the order for a maximum period of 14 days.
• The government is authorised to issue a decree that specifies which parties are entitled to purchase fuel from standby filling stations. The decree must also specify the order in which these parties are to be supplied with fuel, whether their purchases are to be given priority or exclusivity, how long the order is to last, and which counties are concerned.

this law will enter into force on 1 january 2026.

Rationale: The purpose of amending the law is to ensure that obligations relating to petroleum stockpiling, based on practical experience, cause the least possible administrative burden for participants in the energy market, including the petroleum market.

The amendment also aims to enable the Hungarian Hydrocarbon Stockpiling Association to use its revenues to maintain standby filling stations. Another objective is to exempt members of the petroleum sector from paying membership fees for power plants that can also use fuel oil as a secondary fuel, for the periodic maintenance of fuel oil systems, during trial operation and for the production of cogenerated heat energy.