Hungary will lift restrictions on gas and electricity prices for higher-consuming households from 1 August, a government decree said, meaning that many Hungarians will pay much more for the extra energy they consume, Reuters reported.

The measures will help the government close holes in its budget after price caps that have been in place for nearly a decade placed a heavy burden on public finances as global energy prices rose sharply.

Under the decree, households would be eligible for the current capped price for electricity consumption up to 2,523 kWh per year, but would pay about twice as much for electricity consumed above that amount, although the government said the price would still be below the market price.

For gas, the annual use limit for price caps is 1,729 cubic meters per year, above which a price close to market prices applies, resulting in a seven-fold increase.

Under a 15-year agreement with Russian energy giant Gazprom signed last year, Hungary receives 3.5 billion cubic meters of gas a year through Bulgaria and Serbia, and another 1 billion cubic meters through a pipeline from Austria.

Foreign Minister Péter Szijjártó earlier said Budapest was negotiating to buy more gas on the world market before the heating season.