Change in the regulation of the gas business

MOL Hungarian Oil and Gas Company hereby announces that the Minister of Economy and Transport, in line with his obligation to set the gas price in every six months, published the new wholesale and end user prices as of 18 January 2006. The wholesale price of the natural gas is expected to be increased by an average 10%. The gas price increase has been triggered by the continuous increase in the import gas price and the strengthening of the US dollar against the HUF. 

According to our calculation, if the import gas price and foreign exchange rates develop in line with expectations, the current gas price increase will not cover the import costs of the public utility wholesale company in the first half of 2006.

Along with the price setting for the first quarter of 2006 the Minister of Economy and Transport issued a decree on the natural gas price regulation to be in force until 31 December 2009, which makes the price regulation more transparent than earlier. The price setting will be made on a quarterly basis in contrast to the current half year period, as a result the price setting can follow more easily the market development. Paralelly the regulated return will change to 6.9% from the earlier 8.5% in transmission and to 8.4% from 10% in storage serving public utility supply. In case of MOL Földgázellátó Rt. (wholesale, marketing and trading) new element is a 0.5% return on the Cost of goods purchased for resale. At the same time there is a change in the decree on system access tariffs (transport, storage). The new tariffs have already been set in line with the new returns defined in the regulation mentioned above.