BELARUS NEWS AND ANALYSIS

DATE:

20/01/2009

Belarus raises gas price for consumers by 9.8 pct

MINSK, Jan 20 (Reuters) - Authorities in ex-Soviet Belarus raised prices for domestic consumers by 9.8 percent on Tuesday ahead of talks in Moscow aimed at setting a price for gas to be imported from Russia. A resolution issued by the economy ministry said the price had climbed to $174.18 from the previous rate of $158.67 per 1,000 cubic metres. "The gas price for domestic producers was subject to review in connection with a rise in prices from January 1st of gas from the Russian Federation and also in connection with overall changes in economic operations," the resolution said. The increase could be an indicator of what Belarus can expect to pay for imports from its eastern neighbour in the aftermath of the conclusion of a new gas deal between Russia and Ukraine after Gazprom cut supplies for two weeks. Neither Belarus nor Russian giant Gazprom has indicated what price will be set for 2009. At the end of last year, both sides said agreement had been reached on conditions of supply and pricing, with details to be announced subsequently. Belarussian Prime Minister Sergei Sidorsky is to visit Moscow next week. Belarus paid $128 per tcm last year. Officials in the country of 10 million had earlier said they expected to pay up to $160 this year, while Russian representatives have suggested the price will be nearer $200. Belarus, led by President Alexander Lukashenko since 1994, still regards Russia as its strategic partner and long-term plans for a post-Soviet merged state remain in effect, though without great enthusiasm from either side. But Lukashenko, long accused in the West of crushing fundamental rights, has tried in the past two years to improve ties with Western states after an earlier quarrel with Moscow over energy prices.

Belarus and Gazprom signed a 2007 deal providing for Belarus to pay 80 percent of average European prices by 2009. But gas prices have in recent months been closely linked to oil prices.

Under Gazprom's deal signed with Ukraine, Kiev is to pay no more than $250 per tcm over the course of 2009, with the highest price to be paid in the first quarter.

Following big price increases in 2007, Russia extended Belarus a credit of $1.5 billion and a further $1 billion last year, with $1 billion more promised this year.

Belarus has so far this year received $788 from the International Monetary Fund, the first tranche of a credit of $2.5 billion. (Reporting by Andrei Makhovsky, writing by Ron Popeski)

Source:

http://uk.reuters.com/article/oilRpt/idUKLK71098920090120

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