BELARUS NEWS AND ANALYSIS

DATE:

05/01/2007

Belarus hikes price of Russian oil shipments to Europe

Minsk (dpa) - Belarus on Thursday slapped a hefty surcharge on Russian oil shipments sent across the former Soviet republic to European consumers, the Belapan news agency reported.

Russian exporters will pay a transit fee of 45 dollars per ton of oil shipped Westward via Belarusian pipelines. The surcharge is immediately effective, and calculated to bring at least 3.5 billion dollars annually to the Belarusian government.

Transit fees in neighbouring Lithuania and Latvia for similar shipment of Russian oil to European users run between 19 and 20 dollars.

Russian crude exports to Europe via Belarusian pipelines for January through November 2006 amounted to 90.5 million tons of oil or roughly half of all Russian oil exports westward, according to a Belapan news agency report.

Oil transit fees charged Russia by Belarus had been practically nil in the past, because of a free trade agreement in effect since 1992 between the two countries, Belapan reported.

A statement by the Belarusian oil transit pipeline monopolist Belneftekhim cited "Russian failure to live up to the terms of the free trade agreement" as grounds for imposition of the tariff.

Retaliation against hardball energy tactics employed by the Russian natural gas monopolist Gazprom, was another likely reason for the hike, according Belarusian energy industry specialists.

Gazprom in the waning days of 2006 pressured Belarus into accepting a 112 per cent price increase for natural gas imports, and the turnover of a controlling stake in the Belarus' natural gas pipeline network.

The estimated increase in Belarusian government revenues from Thursday's oil transit hike - well in excess of three billion dollars - is almost exactly the same size as expected Belarusian losses due to the Russian gas price spike made official on December 31 2006.

Andrei Popov, Belarus Foreign Ministry spokesman, denied a link between the recent Russian gas price and Thursday's unprecendented oil tax, saying "We (Belarus) have been within our rights to impose a transit fee for a long time...Russia has failed to live up to its international obligations...regarding Belarusian goods."

"Belarus stands ready to guarantee continued transfer of oil to Western markets," he added.

Moscow reacted sharply to news of the hike, a Thursday afternoon announcement from Russia's Ministry of Economic Development and Trade describing the Belarusian move as "unprecedented in world experience...and against the principles of open markets and free trade," according to an Interfax news agency report.

Belarusian President Aleksander Lukashenko has accused Russia's government of using Russia's control over all of Belarus' energy imports to squeeze political and economic concessions out of Minsk.

Gazprom officials have repeatedly claimed their business, Russia's single largest corporation, simply aims to maximize profits, and takes no orders from the Kremlin.

Lukashenko in a Thursday speech to heads of government enterprises said Belarusian business needed to work harder to become more competative, in order to maintain income now that Russia has increased energy costs.

"We must do whatever it takes to continue income generation," Lukashenko said. "Otherwise we betray our trust to average Belarusians."

Almost all of Belarusian industry is government-owned, and managed with a modified form of Soviet-style central planning. Belaus' economy in the past has depended on cheap Russian energy so as to produce competitive goods. // c 2006 DPA

Source:

http://economie.moldova.org/stiri/eng/22913/