Gas ignites new row with Belarus

by Andy Potts

Russia has imposed a five-day deadline for Belarus to pay an outstanding debt of $192 million or face a cut-off.

And while Minsk mutters about a lack of ready cash to foot the bill, energy giant Gazprom is making menacing noises about upping its charges as relations between the neighbouring countries stutter.

The two countries are struggling to complete a long-planned customs union, while there is lingering unhappiness in Russia that Belarus has still chosen not to recognise the independence of South Ossetia and Abkhazia, almost two years after Moscow supported the territories' bid to break away from Georgia.

By threatening a gas shutdown the Kremlin may be seeking to pressure president Alexander Lukashenko on the eve of presidential elections, according to analysts.

In Rossiskaya Gazeta Belarussian political analyst Yury Baranchik said that the deadline was a sign that the simmering dispute had reached a "critical point".

He added that Minsk needed to make concrete proposals about paying its bills and cementing bilateral relations within five days.

Officials in Belarus have yet to react to the deadline, but last week Lukashenko visited Moscow and complained that there wasn't enough money to pay the debt, which was due on June 1.

But president Dmitry Medvedev was unimpressed, saying that this was "insufficient explanation", Interfax reported.

"All financial situations are difficult, and Gazprom has many problems as well," he said at a meeting with Gazprom boss Alexei Miller.

Meanwhile Miller has suggested that gas supplies could be cut in proportion with the money owed - potentially exacerbating Belarus's cashflow problems.

The country profits from its gas transit role, buying up Russian gas at discount rates and selling it on to Europe for a higher price, but Miller warned this trade may be hampered if money was not forthcoming soon.

"In accordance with the contract we have every reason to reduce supplies to Belarus in proportion to the debt to Gazprom," he said.


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