Russia gives Belarus 5 days to pay for gas

By Steve Gutterman

MOSCOW June 15 (Reuters) - Russia threatened on Tuesday to reduce supplies of natural gas to Belarus if it fails to pay what Moscow says is $200 million in debt within five days.

President Dmitry Medvedev issued the warning in televised remarks, turning up the pressure on Belarus amid persistent trade disputes with the smaller former Soviet republic.

The head of Russian giant Gazprom (GAZP.MM: Quote), Alexei Miller, told Medvedev the company could cut back supplies in proportion to the debt Belarus has run up by continuing to pay for this year's supplies at last year's prices.

"Let's do this, then," Medvedev said. "Since we interact with Belarus as partners, let's give our colleagues a five-day period to decide how to conduct themselves."

He told Miller to ask Belarus to pay the debt "in the shortest period of time" and added: "If this is not done, we will have to take strict measures."

Close ties linking the Slavic neighbours have been strained for years, as Belarussian President Alexander Lukashenko has sought to use Russia's eagerness to maintain a friendly buffer state on its western flank to win economic concessions.

Belarus pays the lowest price among Gazprom's customers and has bridled at recent increases, saying it should pay less for oil and gas if Moscow is serious about tightening ties.

Gazprom said last week that Belarus has been paying $150 per 1,000 cubic metres of gas this year, instead of the $169.20 that Gazprom charged in the first quarter and $184.80 in the second, and could owe more than $500 million by year's end

There has been discord over plans for a customs union linking Russia with Belarus and Kazakhstan. Negotiations on Belarus' membership stalled as Russia refused to drop export duties on the oil its sells Belarus.

Under growing financial pressure from Moscow, Lukashenko has tried to improve relations with the West, but with limited success because of EU and U.S. concerns about his authoritarian rule.

(Editing by Mark Heinrich)


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