BELARUS NEWS AND ANALYSIS

DATE:

15/01/2007

Putin estimates Russia's indirect aid to Belarus at $5.8 billion 2007

MOSCOW, Jan 15 (Prime-Tass) -- Russia's indirect aid to Belarus in the form of energy discounts is projected at U.S. $5.8 billion this year, Russian President Vladimir Putin said Monday at a meeting with key ministers, ITAR-TASS reported.

Of the total, discounts on natural gas will come to $3.3 billion, while discounts on oil and oil products will total $2.5 billion, he said.

This accounts for 41% of Belarus' 2007 budget, he added.

Putin said that a recent deal between the two countries on Russia's oil exports to Belarus was a compromise acceptable for both countries.

The compromise is "the price Russia is paying for a smooth and friendly switch to market-based relations and for its support of the Belarusian people," Putin said.

He added that Russia would continue supporting Belarus' economy financially for a long time. He said, however, that starting this year the support would be reduced.

Russia, which until recently exported oil to Belarus free of duty, imposed a $53 per tonne duty on oil exports to Belarus under an oil supply deal, which was concluded last week after a major dispute over oil supplies to Belarus and Russian oil transits through the Belarusian territory.

The new terms are less preferential than they were before. However, Russia's duty on oil exports to Belarus is much lower than the $180 per tonne duty imposed on oil exports to countries outside of Russia's customs union with some former Soviet republics.

In December 2006, Russia and Belarus also settled a dispute over natural gas prices. Under the accord, Russian natural gas monopoly Gazprom hiked its gas price for Belarus to $100 per 1,000 cubic meters from $46.68 per 1,000 cubic meters. The $100 price is still much lower than for most other countries. Many European Union countries pay up to $300 per 1,000 cubic meters of gas supplied by Gazprom.

Under the agreement, Gazprom is also expected to buy a 50% stake in Belarus' state-controlled gas pipeline monopoly Beltransgaz for $2.5 billion over a period of four years. Earlier Gazprom wanted to pay for the stake with gas but subsequently it agreed to pay for it in cash.

Source:

http://www.prime-tass.com/news/show.asp?topicid=55&id=413068