BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Belarus ditches oil transit tax

Belarus has cancelled a transit tax on oil shipments from Russia, according to the country's prime minister.

The move, following meetings between government ministers, marks progress in resolving an argument with Moscow over oil which began earlier this week.

Russia closed the pipeline on Monday after it accused Belarus of stealing oil supplies.

Oil through the Druzhba pipeline - across Belarus - could flow again soon, European customers say.

"The government, taking into consideration bilateral agreements with the Russian government, has taken the decision to cancel the state duty for the transit of oil along the state pipeline network," said Belarussian Prime Minister Sergei Sidorsky.

According to Transpetrol, which runs Slovakia's section of the pipeline, supplies will start later on Wednesday.

Criticism

The move by Russia to cut off supplies via the Druzhba - or Friendship - pipeline has elicited much criticism, most recently from the International Energy Agency's head Claude Mandil.

RUSSIAN OIL USERS*

Hungary - 83.5% of all oil supplies

Slovakia - 82.2%

Finland - 79.1%

Poland - 77.2%

Czech Republic - 49.3%

Belgium - 31.8%

Sweden - 29.4%

Germany - 26.2%

Netherlands - 25.3%

Italy - 18.1%

Austria - 16.8%

France - 11.4%

Denmark - 2.1%

*Source: Petroleum Economist magazine

He said the move undermined faith in Russia as an oil exporter. "It is more difficult to be confident" Mr Mandil told the Reuters news agency.

Mr Mandil added that if stocks in countries affected were to fall under 90 days worth the IEA would "order a coordinated stocks release".

German Chancellor and current European Union president Angela Merkel had denounced the pipeline closure as unacceptable and one that "destroyed trust" in Russia as an energy supplier.

Talks

Before Belarus announced it would end the transit tax, talks between Moscow and Belarus had taken place in an attempt to resolve the dispute.

Following those talks a statement from Belarus President Alexander Lukashenko's office said: "The prime ministers of Belarus and Russia were ordered to work out concrete proposals within two days for resolution of all problem questions."

His office added that suggestions made at those talks needed to be submitted for review by the heads of state by Friday, 12 January.

History

The dispute was sparked when Russia forced Minsk to grudgingly accept a doubling in the price of gas supplies.

In retaliation, Belarus imposed a new tax on Russian oil shipments passing through the country. Russia has refused to pay the duties, saying they are illegal.

On Monday the conflict came to a head when Russian state-owned pipeline firm Transneft closed the Druzhba pipe, saying Belarus had been siphoning off oil supplies as payment in kind for the unpaid duties.

The 2,500-mile-long pipeline has the capacity to ship more than 1.2 million barrels a day to eastern and central Europe and typically works at close to full capacity.

Source:

http://news.bbc.co.uk/2/hi/business/6248251.stm

Google
 


Partners:
Face.by Social Network
Face.by