Hungary has urged the European Commission to initiate an infringement procedure against Bulgaria over Sofia's new tax on Russian gas transit and called for Bulgaria to suspend application of the levy in the meantime.

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Bulgaria passed a new law Oct. 13 that imposed higher transit fees for Russian gas supply transiting Bulgaria -- including to Hungary -- as part of Sofia's response to Russia's invasion of Ukraine.

Hungary's minister for EU affairs, Janos Boka, said Nov. 10 that Bulgaria had adopted the regulation without pre-notification or consultation with Hungary.

"The Bulgarian tax poses a serious threat to the energy security of Hungary and of the entire region," Boka said on X, formerly known as Twitter.

Boka said the tax was a violation of EU law as it qualified as having an equivalent effect of a customs duty, which contradicted the rules of the EU's internal market, the customs union and the common trade policy.

"Today I have sent a letter to the European Commission urging them to initiate immediately an infringement procedure against Bulgaria," Boka said.

"Furthermore, I have requested to ask Bulgaria to suspend the application of the tax until the conclusion of this procedure," he said.

Boka added that if the EC did not comply with the request, Hungary was prepared to turn to the Court of Justice of the EU by the end of the year.

"Winter is coming, there is no time to wait. The Hungarian government is committed to protect Hungarian families and ensuring the security of our country's energy supply," he said.

Russian imports

Hungary -- which retains relatively close ties with Moscow -- is one of only a few EU countries that still takes significant volumes of Russian pipeline gas, mostly via TurkStream and onshore links in Turkey, Bulgaria and Serbia.

The new Bulgarian law, which is already in effect, imposes a new duty of Lev20/MWh (Eur10.27/MWh) on the transit of Russian gas.

The EC could not be reached for immediate comment on Nov. 10. But EU energy commissioner Kadri Simson said Oct. 17 that her Hungarian colleague had raised the issue of the new levy at a meeting of EU energy ministers in Luxembourg.

"From the EC perspective, my colleagues in trade will look into the details," Simson said. "This is a trade measure and they will analyze the decision imposed by the Bulgarian side."

The stand-off comes as European gas prices remain high. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Nov. 9 at Eur49.11/MWh.

Russian assurance

Meanwhile, Russian President Vladimir Putin on Oct. 17 assured Hungary that its Russian gas supply obligations would be met despite the new law in Bulgaria.

Putin and Gazprom CEO Alexei Miller met with Hungarian foreign minister Peter Szijjarto in Beijing on Oct. 17 with discussions centering on gas supply security.

"Putin and Gazprom's CEO confirmed that contractual gas supply obligations to Hungary will be met despite the increase in transit fees in Bulgaria," Hungarian government spokesperson Zoltan Kovacs said.

He added that Szijjarto also underlined that Hungary-Russia energy cooperation was a "prerequisite" for Hungary's energy security and that so far this year Russia had supplied 4.8 Bcm of gas to Hungary, mainly via the TurkStream link.

Hungary can also receive Russian gas via Ukraine.

Hungary agreed a 15-year deal in September 2021 with Gazprom for the supply of 4.5 Bcm/year of gas but has been importing additional volumes on a short-term basis over the past two years.

As well as Hungary, Russian gas via TurkStream can also be delivered to Serbia, Romania, Greece, North Macedonia and Bosnia-Herzegovina. The pipeline began flowing gas in January 2020.