Russia turns off the taps again: Moscow slashes gas supplies to Belarus amid claims of ?130m in unpaid bills

Russia cut gas supplies to Belarus by 15 per cent today pressing its neighbour to pay a ?130 million debt and raising fears of disruptions in deliveries to Europe.

Relations between the two have soured since they failed to agree on unified customs rules and Belarus gave refuge to ousted Kyrgyz President Kurmanbek Bakiyev.

Russia supplies a quarter of Europe's gas needs and uses Belarus, which borders European Union member Poland, as one of two key transit routes for oil and gas to the continent.

Previous pricing disputes with Minsk led to oil supply cuts, with Poland and Germany being affected most.

A similar standoff with Kiev halted the much larger Russian gas supplies across Ukraine for almost two weeks in January 2009, leaving many Europeans without fuel during a cold snap.

Russian President Dmitry Medvedev told gas monopoly Gazprom to cut supplies from Monday, the Kremlin's press office said. Gazprom said it had started implementing the order.

'The debt has not been redeemed, and starting from 10am on June 21, a 15 per cent reduction of Russian gas supplies to Belarus has been imposed,' Gazprom head Alexei Miller said on state television channels.

He said flows could be cut by as much as 85 per cent if Belarus failed to redeem the debt.

Gazprom warned the EU Commission about possible supply problems as part of an early warning agreement, said company spokesman Sergei Kupriyanov.

Russian gas transit via Belarus amounts to one-tenth of Europe's needs, much smaller than the transit via Ukraine.

'While a lengthy suspension of transit through Belarus could cause supply problems for Europe, we do not anticipate any major supply disruptions over the summer months as a result of reduced European demand and available spare supply capacity through Ukraine,' said Alexander Burgansky of Renaissance Capital brokerage.

'At the same time, we believe the crisis is likely to be over by autumn, judging by the timeline of similar disputes in the past,' he added.

Western politicians have repeatedly accused Russia of using its energy might as a tool of intimidation against its smaller neighbours and have called on the continent to diversify away from Russian deliveries.


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