BELARUS NEWS AND ANALYSIS

DATE:

15/01/2007

Russia Slashes Oil Export Duty for Belarus-Bound Crude

MosNews

Following two days of intense oil negotiations, Russia has reduced its oil export duty for Belarus-bound crude from $180.7 to $53 per metric ton, Russian Prime Minister Mikhail Fradkov said late on Friday, Jan. 12.

The oil export duty, effective from January 1, 2007, ends horse-trading between the two former allies, which disrupted Russian crude supplies to Europe and tarnished Russia's reputation as a reliable energy supplier.

The two sides also agreed that Russia would receive 70 percent compensation from Belarus' exports of refined Russian oil in 2007. This compensation is set to go up to 80 percent in 2008 and 85 percent in 2009, Fradkov said, quoted by RIA Novosti.

Early on Thursday, Russian pipeline monopoly Transneft resumed Europe-bound oil supplies via the Druzhba (Friendship) oil pipeline system passing through Belarus, ending a halt in exports that lasted several days. The supply interruption affected Germany, Poland, Hungary, the Czech Republic and Slovakia.

Moscow halted deliveries to Europe via the pipeline on January 7, saying Belarus was tapping oil, following a tit-for-tat price and tariff dispute. Belarus imposed a transit levy of $45 per metric ton of crude after Moscow doubled the price of natural gas and introduced a duty on oil supplies to Belarus as of January 1.

The standoff, which drew parallels with an energy row with Ukraine involving natural gas this time last year, triggered further accusations in Europe that Russia was using hydrocarbons as a political tool, and discussions on the need to diversify energy sources.

Source:

http://www.mosnews.com/money/2007/01/15/belarusduty.shtml