BELARUS NEWS AND ANALYSIS

DATE:

14/05/2008

Belarus proposes gas price review with Russia-PM

MINSK, May 14 (Reuters) - Belarus expects no new price rises in imported gas from Russia this year and has asked Moscow to soften a proposed scale to bring them towards European levels by 2011, the ex-Soviet state's prime minister said on Wednesday.

Under a deal struck with Russia two years ago, Belarus pays $128 per 1,000 cubic metres of gas this year -- a level intended to represent 67 percent of average European prices. This figure is to rise to 80 percent next year and 100 percent in 2011.

"We are to return very soon to an examination of how prices are determined for Belarus," Prime Minister Sergei Sidorsky said in an interview.

"The price has been set for this year...Price rises set down in the scale up until 2011 must correspond to the ideas contained within the Russian government."

Government officials on both sides, he said, would discuss the issue in the near future and he said Belarus would call for identical conditions of supply for industrial customers in both countries.

Russia's government has promised to fully liberalise domestic prices and bring them in line with export prices minus transportation costs and export duties, but a spike in global energy prices has made those plans less firm.

Some officials say Russia may fail to bring domestic and export prices to parity in 2011 as it may hit the economy.

A dispute over gas prices and conditions of shipment for oil prompted Russia to threaten to cut gas supplies to Belarus in 2007, as it did a year earlier to Ukraine.

The issue was subsequently settled through talks, though the quarrel with Moscow prompted President Alexander Lukashenko, accused in the West of human rights violations, to call for better ties with the European Union. (Writing by Ron Popeski; editing by James Jukwey)

Source:

http://www.guardian.co.uk/business/feedarticle/7516735

Google