Economy 25 February 2026, 9:00am

The year 2026 began with colder-than-usual weather, which significantly increased the heating demand of the Hungarian population. Consequently, many households were at risk of falling below the preferential utility cost protection threshold, which would have resulted in significantly higher electricity and gas bills. Therefore, at the end of January, the government announced that it would introduce a cap on the cost of residential excess energy consumption. As it later turned out, the cost of this would not be covered by the state, but by the subjects of the Robin Hood tax (energy companies) in the form of a one-off special tax.

After the initial shock had passed, we surveyed the relevant corporate players to find out what kind of response the government's announcement had generated in the industry.

Indiscriminately

One of the biggest problems with this measure is the 'lawnmower' principle, which is worth highlighting. Households are essentially supplied by the state-owned MVM Group as part of its 'utility protection' service, i.e. the residential energy subsidy scheme. However, the cost of the January 'utility price freeze' will be covered by energy companies subject to the Robin Hood tax, except for distributors. Some of the affected energy traders, however, only have contracts with corporate users and do not supply the general public.

This means that

the levy will also affect market players that have nothing to do with the January surge in household consumption.

We understand that

• the electricity and gas trading segment may bear a significant portion of the HUF 55 billion burden, estimated at HUF 25-30 billion.
• Oil and gas group Mol, which is also subject to the Robin Hood tax, may also bear a significant proportion of the remaining costs. However, it is difficult to link the company's tax-affected activity (fuel sales) to household utility bills, so the justification for the levy is also debatable from this point of view.

In addition, the state compensates MVM from the budget for the cost-covering service. Therefore, in certain cases, the withdrawal from MVM's subsidiary may be merely formal, with the possibility of receiving part or all of it back through the 'utility protection' mechanism at a later date. Other traders do not have this compensation option, so for them, the levy is a real burden.

The industry players we interviewed also emphasised that corporate energy consumption is less sensitive to temperature than residential energy consumption. This is because energy consumption in industrial companies is largely related to technological and manufacturing processes rather than heating.

Furthermore, energy trading contracts typically cover at least one year, meaning that excess turnover in a given month — in this case, January — does not necessarily mean that consumption will be higher throughout the entire contract period. Even if, in individual cases, additional profits were to arise, the question arises as to whether, following the same logic, traders could claim support in the event of lower turnover due to milder than average weather conditions, Portfolio was asked rhetorically.

Almost everyone agreed that

it should be the responsibility of traders (and their customers) to manage the risk of quantitative changes in the competitive market

that occurred partly due to weather changes.

Why 2024?

It is also difficult to understand why the government used the sales revenue from two years ago as a basis if its intention was indeed to recoup the windfall profits made in January. As has been pointed out to us, the government decree published specifies the 2024 sales revenue of the companies concerned as the tax base, which is an unusual taxation practice because it determines the tax burden on the basis of a financial year that has already closed.

Although the 0.5% tax rate seems low, one trader told us that energy trading is essentially a 'penny-pinching' industry. This revenue-based tax burden could therefore render some traders unprofitable in 2026, especially when combined with the 9% profit-based corporate tax and the 31% 'Robin Hood tax' on energy suppliers. The resulting effective tax rate could exceed 100%.

This situation may arise if the new tax burden exceeds 60% of pre-tax profits in 2026, which is quite possible given that, due to higher market prices, sales revenues were significantly higher in 2024 despite an unchanged portfolio size, as the trader we interviewed pointed out.

What will this lead to?

What can the companies concerned do in this situation? If this tax burden threatens the company's ability to operate or the profitability expected by its owners,

it is not out of the question to initiate the renegotiation of existing commercial contracts, terminate them in the absence of an agreement or, if the trader's contract allows it, unilaterally raise prices to a reasonable extent,

our source pointed out.

In the long term, this will negatively impact the competitiveness of domestic companies, as market players will be forced to hedge against similar regulatory risks. It is also important to mention that special taxes and similar measures that complicate business planning and forecasting can negatively impact industry investments by making bank financing more difficult. This is particularly critical in the current situation, where a number of important system-wide developments (e.g. energy storage facilities and additional renewable energy generation units) are in the preparatory phase. At the same time, these measures do little to encourage new market players, which would result in more intense competition.

Overall, it is clear that market players believe government measures targeting the population come at a high price. Similar cold winters could easily occur again, causing significant uncertainty for the affected energy companies' future business plans and raising questions about their competitiveness.

Cover photo: 2024 Photothek via Getty Images