BELARUS NEWS AND ANALYSIS

DATE:

01/01/2007

Tensions rise in Belarus gas row

BELSAS and Russia have traded accusations of "blackmail" in their dispute over gas prices.

Russian state-controlled energy giant Gazprom wants to raise the price Belarus pays by 123%, threatening a cut-off at 0700 GMT on New Year's Day. While negotiations continue in Moscow, however, Belarus President Alexander Lukashenko has said he will not agree to the price rise. The stand-off could see a reduction in supplies to Europe.

It echoes a fierce row last year between Russia and Ukraine, and comes as Russia is pushing up prices for many of its customers. "Belarus won't bow to Gazprom's blackmail," Mr. Lukashenko said, according to Belarus state news agency BeITA.

"If they keep putting pressure on us, we shall go down into the bunkers, but we shall not surrender."

RUSSIAN GAS COSTS FOR 2007, Ukraine: $130 for 1,000 cubic metres (was $95), Georgia: $235 ($110), Moldova: $170 ($160), Belarus: Gazprom wants $105 ($47), Azerbaijan: Gazprom wants $235 ($110).

Earlier on Friday, Gazprom Vice-President Alexander Medvedev was quoted by France's Le Figaro newspaper as calling Belarus's tactics of warning of shortages in Europe a "grotesque blackmail". Talks are due to continue on Saturday after the sides failed to reach an agreement on Friday. Russia has been accused of using its energy muscle to reimpose its will on what is sometimes called Russia's "near abroad" - the countries that were once part of the Soviet Union.

Although some of the targeted countries, such as Ukraine and Georgia, have strained relations with the Kremlin, Belarus has historically remained an ally throughout the post-Soviet period.

Gazprom insists the planned rise from $47 to $105 merely reflects market prices.

However, as has been the case with Belarus, the price rises are often coupled to demands for shared ownership of those countries' gas or oil distribution networks.

A half-share in Belarus' gas monopoly Beltransgaz, which operates its own pipelines and Gazprom's export pipeline, is up for grabs - but only, says the government in Minsk, if the price of gas stays lower.

People in Belarus may have to wrap up even warmer at New Year Russia's gas customers, meanwhile, are urging that a deal be struck as soon as possible. Europe, in particular - which gets about 5% of its supplies via Belarus, accounting for a fifth of the country's exports - is keen to avoid a repeat of the gas shortages which accompanied the Russia-Ukraine dispute. At that time, Gazprom accused Ukraine of siphoning off gas meant for Europe, and is now warning Belarus against doing the same thing.

Source:

http://www.vanguardngr.com/articles/2002/business/january07/01012007/b201012007.html