BELARUS NEWS AND ANALYSIS

DATE:

04/01/2007

Russia rues Belarus oil tax move

Russia has expressed dismay after Belarus imposed big taxes on Russian oil pumped through its pipelines to customers in Europe.

The move came after Belarus reluctantly agreed to let Russian state energy giant Gazprom double the price of gas.

Belarus says it will charge Russia $45 (?23) per tonne of oil.

Russian economy ministry official Maxim Medvedkov said Moscow was "very disappointed" by the "unprecedented" decision and hoped to find a solution.

Analysts said the move was unlikely to affect world oil prices but could cause short-term disruption to refiners in countries like Germany.

Every day Russia transports about a fifth of its oil exports - or one million barrels - through Belarus, mainly to refiners in Poland and Germany.

Experts said the move could disrupt the supply chain to those countries as they search for cheaper supplies.

Rows

The tit-for-tat tax move is the latest evidence of a souring in the relationship between the two countries over a series of economic disputes.

On 31 December, Belarus agreed to a huge increase in Russian gas charges - from $47 to $100 - after Moscow threatened to cut supplies if Belarus refused to agree new charges.

Announcing the tax, President Alexander Lukashenko accused Moscow of taking "extremely unfriendly steps" toward its neighbour.

"If Russia, choking on this influx of petrodollars ..., is still willing to make a scapegoat of Belarus ... then let's ask the Russian Federation - so huge and so rich - to pay us in full for our services," he added.

Mr Medvedkov said: "We are very disappointed with our Belarusian colleagues' decision to restrict the transit of Russian oil through Belarusian territory.

"This is an unprecedented step. There have been no cases in the world of countries taking such decisions.

"Everyone guarantees the principle of freedom of transit of foreign goods through their territory. This principle is reflected in our agreements, which Russia and Belarus have signed and which are in operation.

"We hope that this situation will soon be rectified and, for our part, will take all the necessary measures for that."

Russia has been accused of using its energy muscle to re-impose its will on what it has sometimes called its "near abroad" - the countries that were once part of the Soviet Union.

Source:

http://news.bbc.co.uk/2/hi/business/6232029.stm