The Russian President has told the gas giant, Gazprom, to reduce gas supplies to Belarus by 85 percent, a move which is feared to affect Europe's gas supplies.
President Dmitry Medvedev told Gazprom's Alexei Miller to prepare to reduce gas supplies from 0600 GMT June 21, AFP reported Monday.
Miller noted that the measure was taken due to Belarus' failure to pay $192 million in unpaid debts.
The country sent a delegation to Moscow to settle the debt issue on Sunday. Gazprom's chief executive said Minsk admits the debt but proposes to pay it "with machinery, equipment and a series of other products." However, the talks proved fruitless, he noted.
On the other hand, Belarusian First Deputy Energy Minister Eduard Tovpinets said on Friday that Gazprom owed some $200 million to Belarus for gas transit fees to Europe.
Disputes between the two neighbors over gas prices and transit terms have always been a threat to European countries, which rely on Russian gas piped through Belarus.
Earlier in January 2009, Gazprom halted gas supplies to Europe for nearly two weeks over unsettled disputes with Minsk over gas prices and transit terms.
Russia sets the gas price at $169 per 1,000 cubic meters for the first quarter of the year. Belarus has been paying $150 since January.