Hungary to block EU funds for member states until Ukraine allows Lukoil transit - Reuters

That's according to Hungarian Foreign Minister Peter Szijjarto who was quoted as saying by broadcaster ATV, Ukrinform reports, citing Reuters.

"As long as this issue is not resolved by Ukraine, everyone should forget about the payment of the 6.5 billion euros of the European Peace Facility (EPF) compensation for arms transfers," Szijjarto said.

Additionally, in response to the situation on Tuesday, Hungary's energy ministry convened a working group concerning the security of supply, which "reviewed the steps taken so far and possible next steps," a statement by the ministry read.

Slovakia and Hungary said earlier this month that they had stopped receiving oil from Lukoil through the Druzhba pipeline after Ukraine imposed a ban last month on the transit of resources from Lukoil.

Both countries asked the European Commission on Monday to mediate a consultation procedure with Ukraine. The procedure would allow for the issue to go to court unless the EU executive body acts within three days.

The EPF, created in 2021, operates as a cashback scheme that gives EU members refunds for sending munitions to other countries.

Since Russia's invasion of Ukraine in 2022, member states that gave weapons to Ukraine can ask for compensation from this fund. But Hungary has been blocking the disbursement of the next tranche of EPF money for more than a year, citing various issues.