BELARUS NEWS AND ANALYSIS

DATE:

13/01/2007

Russia cuts duty on Belarus oil exports

Staff and agencies

By MIKE ECKEL, Associated Press Writer

MOSCOW - Russia has reportedly agreed to slash the duty on oil exports to Belarus by 70 percent and Belarus will share with Moscow a substantial amount of profits from the refined oil products it sells to Europe.

"In fact, we will for example earn $53 from every metric ton (of oil) exported to Belarus," Fradkov was quoted as saying by Interfax. That is down from a duty of $180 per ton.

The announcement capped a week of discussions and brinkmanship by Russia and Belarus, and came two days after Belarus' government canceled a $45-per-ton transit tax on Russian oil - a tax that had prompted Moscow to cut off oil shipments to Belarus and disrupt supplies to Europe.

Fradkov said the latest agreements would bring over $1 billion into the Russian budget, Interfax reported.

German Foreign Minister Frank-Walter Steinmeier, whose country holds the rotating EU presidency, said after the oil was turned on again that "we would now like to open a dialogue with Russia in order to establish our future energy relations on a reliable, enduring basis."

Andrei Illarionov, a former top economic adviser to President Vladimir Putin and an open critic of Kremlin policies, said Russia was the clear loser in what he called a "trade war."

He said Russia would have to include "risk clauses" in any future energy supply contracts in order to protect consumers against such supply disruptions.

On Monday, Russia shut off the flow, claiming that Belarus had siphoned off some 80,000 tons of oil as payment for the transit fee.

Belarus' largely centralized Soviet-style economy depends on cheap Russian energy supplies. But Russia is moving to end its longtime practice of selling energy at discounted prices to ex-Soviet states.

Source:

http://www.localnewsleader.com/elytimes/stories/index.php?action=fullnews&id=42189