BELARUS NEWS AND ANALYSIS

DATE:

04/01/2007

Belarus says informed Russia of imposing oil transit duty

MINSK, January 4 (RIA Novosti) - Belarus's state oil company Belneftekhim said Thursday it has officially notified Russian pipeline monopoly Transneft of imposing a transit duty of $45 per metric ton of Russian oil from January 1.

Belarusian President Alexander Lukashenko imposed the duty in response to Moscow more than doubling the price for its natural gas supplied to the 10-million nation to $100 per 1,000 cu m from $46.7 in its move to gradually make all former Soviet republics pay market prices for energy supplies.

Russian energy giant Gazprom also agreed to buy out 50% of Belarusian gas pipeline operator Beltransgaz shares for $2.5 billion within the next four years, although Gazprom earlier said the Belarusian pipeline company was worth $3.3 billion instead of $5 billion assessment by Belarus.

The gas deal was concluded minutes before the New Year, alleviating the European Union's concerns about likely disruptions in gas supplies to Europe in case the Russia-Belarus contract was not signed.

The dispute with Belarus was reminiscent of a gas spat with Ukraine early last year when Russia briefly suspended gas supplies, affecting consumers in Europe as Ukraine started siphoning Russian gas transited through its territory and intended for European countries.

Belarus earlier suspended deals with Russian oil suppliers after Russia said it will impose from January an oil export duty for Belarus at $180.70 per metric ton.

Russia has sought to prevent losses being inflicted on its budget from crude supplies to its ex-Soviet neighbor. Belarus, with which Russia is creating a union, refines oil and re-exports it to third countries, paying no taxes to the Russian budget.

Russian officials said the volume of crude supplied to Belarus significantly exceeds the country's domestic demand, encouraging re-exports.

Belarusian First Deputy Prime Minister Vladimir Semashko said Tuesday he hopes Russia will abandon its plan to impose duties on crude oil supplies in exchange for 50% of the revenues Belarusian refineries receive from the re-export of derivatives to Europe.

"Belarus is ready to share with Russia half of its profits from the export of refined oil products to encourage Russia to lift duties on crude [sold to Belarusian refining companies]," Semashko said, adding that such an arrangement could be made by mid-January.

Semashko said Belarus' refineries will not resume suspended deals with Russian suppliers until then and that they have enough stored crude to operate at 60%-65% their normal capacity for a few more weeks.

Source:

http://en.rian.ru/world/20070104/58429458.html