Hungary weighs halting power and gas to Ukraine amid Russian oil dispute

By Krisztina Than

BUDAPEST, Feb 19 (Reuters) - Hungary is considering cutting off power and gas exports to Ukraine unless Kyiv resumes Russian oil shipments to the country via the Druzhba pipeline, Prime Minister Viktor Orban's chief of staff told a briefing on Thursday.

Energy Standoff Over Druzhba Pipeline

Hungary and Slovakia, which have the only remaining refineries in the European Union using Russian oil through Druzhba, have been trying to secure supply since flows were halted on January 27 after what Ukraine said was a Russian drone attack that damaged pipeline infrastructure.

Strategic Reserves and Loans

The refineries plan to start tapping state oil reserves, with the Slovak government on Wednesday approving a loan of 250,000 tons.

MOL Request Frees Hungarian Reserves

Orban's chief of staff Gergely Gulyas said the Hungarian government had also freed up strategic oil reserves following a request from refiner MOL.

ACCUSATIONS FLY

Diesel Export Suspensions to Ukraine

Hungary and Slovakia have accused Ukraine of delaying a restart to flows for political reasons, and on Wednesday they announced a halt in diesel exports to Ukraine.

Hungary's Prime Minister Viktor Orban has been a vocal opponent of Ukraine's bid to join the European Union, and Hungary and Slovakia have both maintained good relations with Russian President Vladimir Putin through almost four years of war in Ukraine.

Threat to Halt Power and Gas Flows

"We are also considering the option of stopping power and gas shipments towards Ukraine," Gulyas said, adding that Budapest was coordinating its steps with Slovakia, unless Ukraine resumes crude delivery via Druzhba.

Slovakia’s Emergency Electricity Warning

Slovakia's Prime Minister Robert Fico on Wednesday also raised the possibility of halting emergency electricity supplies to Ukraine.

"There will be further countermeasures if the Ukrainian government does not change its decision and continues to halt the Druzhba pipeline with false arguments," Gulyas said.

Reuters has requested comments from the Ukrainian foreign ministry and the state oil and gas company.

ExPro Figures on Power and Gas

Ukraine’s Import Dependence

Hungary and Slovakia have accounted for 68% of Ukraine's imported power this month, according to Kyiv-based consultancy ExPro. Hungary also accounts for about a third of Ukraine's current gas imports, according to the country's gas transit operator.

Election Backdrop and Accusations

Gulyas repeated an allegation that Ukraine was trying to interfere in an election in Hungary on April 12, which Kyiv has denied.

Orban has been in power for 16 years but currently lags in polls ahead of the election.

EU Exemption and Adriatic Route

Hungary on Wednesday also said it and Slovakia had asked the European Commission to enforce an exemption that allows them to buy seaborne Russian oil despite EU sanctions banning member states from importing it.

This would be via the Adriatic pipeline through Croatia, whose economy ministry has said its pipeline could carry more oil to Hungary and Slovakia, but that it should not be Russian crude.

Reporting and Edits

(Reporting by Krisztina Than; additional reporting by Pavel Polityuk in Kyiv and Jan Lopatka in Prague, editing by Emelia Sithole-Matarise, Alexandra Hudson)