Hungary doubles social fuel budget and cuts firewood VAT

The Hungarian government has announced significant measures to support households with heating costs. The budget for the Social Fuel Program will double from 5 billion to 10 billion HUF starting from the 2026–2027 heating season. This increased funding is intended to be permanently integrated into the central budget from 2027 onwards. To secure funds for the 2026 application cycle, approximately 4.4 billion HUF will be reallocated from unused municipal salary and reimbursement budgets.

In addition to increased subsidies, the Hungarian Parliament has decided to reduce the VAT on firewood from 27% to 5%, effective September 15. To ensure price stability, the government has decided to fix the net selling price of firewood based on January 1st rates. The program continues to operate through local municipalities, which identify eligible needy households and manage the distribution of support. Officials noted that the changes address the fact that state support levels had not increased since 2019 despite changing market and environmental conditions.