Russia unlikely to resume oil flow to Belarus soon

MOSCOW/MINSK, Jan 18 (Reuters) - Russia will not restart oil supply to Belarus, halted due to a pricing row on Jan. 1, until at least Thursday, when the heads of their governments are scheduled to meet, official sources told Reuters on Tuesday.

The standoff has already resulted in Minsk suspending diesel exports to Europe, though Russian crude oil supply to Poland and Germany via Belarus along the Druzhba pipeline remains intact. [ID:nLDE70G27E]

The Russian government website said Prime Minister Vladimir Putin will meet his Belarusian counterpart Mikhail Myasnikovich on Thursday in Russia to discuss "bilateral cooperation in energy sphere" among other issues.

The meeting is also scheduled a day before the possible inauguration of Belarussian President Alexander Lukashenko, who was re-elected in December. The date for the inauguration has not yet been officially confirmed. [ID:nLDE70G0TF]

On Monday, Russian Deputy Prime Minister Igor Sechin, who oversees the energy sector, met Belarus First Deputy Prime Minister Vladimir Semashko for the oil supply talks, government sources told Reuters.

"It was a preparation for the Thursday meeting (between Putin and Myasnikovich)," a source said.

The disagreement over prices came to the fore after Minsk entered a free-trade zone with Russia and Kazakhstan, and Russia subsequently dropped export duties for its oil supplies to Belarus.

Russian companies are still in talks with Belarus on prices of oil destined for Belarus refineries, which have a daily capacity of 360,000 barrels.

"It is expected that the prime minister will discuss the oil supply issue with Putin. As the matter cannot be resolved by companies, it goes up to a more higher level," said a Belarus government source.

The Russian firms are asking for a $45 rise per tonne as Belarus will increase transit tariffs by 12.5 percent from Feb. 1 and crude oil prices on international markets have shot to two-year highs.

Russia had been scheduled to deliver 1.5 million tonnes of oil to Belarus in January.

In December Russia and Belarus agreed that Moscow would drop duties on crude oil exports to Belarus from next year if Minsk hands Moscow all the duties it gets from exporting products made from Russian oil.

"Considering the global agreement is signed I think both sides will be able to reach a compromise on details. There is a certain optimism," said Andrei Derekh from Uniter investment company in Belarus. (Reporting by Vladimir Soldatkin and Andrei Makhovsky; writing by Vladimir Soldatkin; editing by James Jukwey)


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