BELARUS NEWS AND ANALYSIS

DATE:

09/01/2007

Moscow will not start talks until Belarus lifts transit fee

MOSCOW, January 9 (RIA Novosti) - Russia will not start talks on ending the current standoff with Belarus until it lifts its transit levy on Russia's Europe-bound oil, the economics minister said Tuesday.

Russia halted crude supplies via its western neighbor on Sunday, accusing Belarus of siphoning off crude designated for Europe from the Druzhba (Friendship) pipeline.

"The first [condition for talks] is the lifting of the transit levy on Russian oil. The second is the resumption of transit to European countries. We will not engage in talks until these conditions are met," Economic Development and Trade Minister German Gref said.

The dispute began when Moscow doubled the price for natural gas it supplies to its ex-Soviet neighbor to $100 per 1,000 cubic meters as of January 1, and imposed an oil export duty of $180.7 per metric ton. Belarus, whose economy was set to be hard hit by the charges, retaliated January 3 by introducing a transit fee of $45 per metric ton for crude passing through its territory to Central Europe.

The economics minister said Russia regards Minsk's decision to impose transit charges as unprecedented in international practice, and as contravening international norms.

Gref said, "Today we met with the Belarusian prime minister and informed our Belarusian partners on Russia's position, which remains unchanged."

The minister also said Russia's decision to introduce an oil export duty was not a discriminatory move, and was made in line with international and bilateral agreements. But he said Moscow could review the export duty figure as soon as Belarus lifts its levy on oil transit to Europe.

The minister said talks with a Belarusian delegation in Moscow ended on a positive note Tuesday, and will continue, but that a date has not been fixed for the next round of negotiations.

The economics minister said Russia's priority is to fulfill its all obligations on oil supplies that it has given to its European partners.

"Customers' interests are above all else. Our customers are our European partners, and we will do everything possible not to compromise their interests," Gref said.

Druzhba, one of the world's largest pipelines, passes through European Russia to Belarus, where it divides into two branches. The northern branch supplies Poland and Germany, and the southern route passes through Ukraine, to Hungary, the Czech Republic, and Slovakia.

Poland and Germany announced Monday that Russian crude supplies through the pipeline had been disrupted. Russia's pipeline monopoly Transneft said it had halted supplies as of Sunday morning, due to Belarus's tapping Europe-bound crude.

Russia currently exports some 20% of its oil via the Druzhba pipeline, and the loss of that route could leave Russia with an oil surplus.

Source:

http://en.rian.ru/world/20070109/58756584.html