BELARUS NEWS AND ANALYSIS

DATE:

11/01/2007

Russia Resumes Oil Exports as Belarus Backs Off

MosNews

According to Alexei Kostuchenko, general director of pipeline concern Gomeltransneft-Druzhba, Belarus resumed transferring Russian oil to Eastern Europe late Wednesday, the Associated Press news agency reports.

Kostuchenko said that Russian oil entered the Belarusian system around 10:30 p.m. local time Wednesday, and was being pumped to Poland, Germany, Ukraine, Slovakia, the Czech Republic and Hungary. He did not give any details about the volume being moved.

The dispute, which had entered its third day, centered on Russia's decision last month to impose a hefty duty on oil exports to Belarus, with Moscow complaining that the previous duty-free regime cost the Russian budget up to $4 billion a year in lost revenues. Belarus reaped billions in revenues by refining cheap Russia oil products and selling them at hefty profit to European markets.

Minsk - whose centrally controlled economy is heavily reliant on cheap Russian energy and duty-free trade with Russia - responded last week by slapping a $45 per ton tax on Russian oil pumped across Belarus to Europe.

On Monday, Russia stopped pumping oil to Europe via the Druzhba pipeline and accused its neighbor of siphoning off oil. By Tuesday, the stoppage had affected supplies to Ukraine, Germany, Poland, Hungary, the Czech Republic and Slovakia.

The two countries' presidents Vladimir Putin and Alexander Lukashenko held talks by telephone Wednesday. Soon after, Belarus' government announced the cancellation of the $45-per-ton duty, and Prime Minister Sergei Sidorsky announced he would fly to Moscow on Thursday for meetings with his Russian counterpart.

European Union leaders have strongly criticized the disruptions, which came one year after a price dispute between Russia and Ukraine led to a brief interruption of EU natural gas imports from Russia.

Source:

http://www.mosnews.com/news/2007/01/11/belarussianoil.shtml

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