BELARUS NEWS AND ANALYSIS

DATE:

16/03/2010

Putin offers Belarus zero oil import duties

By YURAS KARMANAU

BREST, Belarus

Russian Prime Minister Vladimir Putin offered Tuesday to abolish import duties on Russian oil for neighboring Belarus starting in 2012.

Putin arrived in Brest, on the Belarus-Polish border, for discussions with the Belarusian prime minister on creating a single economic zone.

Belarus, a former Soviet republic, receives 20 million tons of oil from Russia, two thirds of which it refines and ships to the West in a cargo worth more than a third of all export revenues. Belarus pays full import duties on the Russian oil it exports but none on the oil it consumes. Putin said Tuesday that all tariffs would be waived if Belarus agreed to enter a single economic zone.

"With the creating of the single economic space all internal duties should be removed," Putin said, adding the zone should come into effect Jan. 1, 2012.

Analysts say Putin wants favors from Belarus in return, such as recognition of the Moscow-friendly breakaway provinces of Georgia. Putin lamented Belarus' caution over the thorny issue, saying he had hoped Belarus would "quickly, energetically and dramatically support Russia ... but this is not happening."

In what some observers have called a snub to Putin, Belarus' authoritarian President Alexander Lukashenko was in Caracas on Monday and Tuesday to secure oil deals with Venezuelan President Hugo Chavez.

"Putin is trying to buy Belarus' loyalty," said Alexander Klaskovsky, a political analyst. "But Minsk is wary that the Kremlin is being greedy and won't pay up." Minsk is the capital of Belarus.

Russia is on a drive to reassert its Soviet-era influence in the former satellite states, and some observers say Putin is trying to keep them on a short leash by using the country's formidable energy resources.

"Putin ... harbors imperial ambitions," said another analyst, Yaroslav Romanchuk. "And Minsk is trying to make Russia pay a pretty penny for these ambitions."

Putin also called for a single currency to be adopted between the two nations by 2012.

Lukashenko has ben accused of playing Russia and the West off each other to secure loans and political support from both.

Venezuela, also a strong Russian ally, plans to sell 80,000 barrels of heavy crude a day to Belarus, President Hugo Chavez said Monday.

Russia has its own considerable economic interests in Venezuela.

Source:

http://www.businessweek.com/ap/financialnews/D9EFUCE81.htm


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