BELARUS NEWS AND ANALYSIS

DATE:

15/12/2006

Russian press pessimistic as Belarus' Lukashenko arrives to negotiate gas prices

MOSCOW (AFX) - Belarus President Alexander Lukashenko arrived in Russia to meet President Vladimir Putin in an attempt to persuade him not to raise prices for Russian gas ahead of an ultimatum which expires on Jan 1 2007, local press reported.

"The meeting should clarify whether Russia will cut off deliveries of gas to Belarus," Kommersant newspaper reported.

Izvestia newspaper, which has links with the government, said it was essential to reach an agreement on the quadrupling of the price of Russian gas delivered to Belarus, which is about to rise to 200 usd per 1,000 cubic metres, in order to "avoid a crisis in the energy sphere". Izvestia said, "This reinforces the positions of those who, in the West, are now talking about 'energy blackmail' by Russia".

But the Russian press are mostly pessimistic about the prospect of the two leaders reaching an agreement.

The Belarus company Beltransgaz, which manages the network of gas pipelines, will be at the centre of negotiations. Russian gas giant Gazprom could accept a less steep hike in its tariffs in exchange for a controlling stake in Beltransgaz, which transports 20 pct of the Russian gas destined for Europe.

"The presidents of Russia and Belarus should also study the price of Beltransgaz", Kommersant said. "The main question is whether Alexander Lukashenko is ready to give Gazprom control of Beltransgaz under conditions acceptable for the gas monopoly", it said.

"There is little chance that the talks will bring an end to the tensions between Moscow and Minsk -- the Belarus president will no doubt not hand over Beltransgaz to Russia", Nezavissimaia Gazeta reported.

"That means that in return he will not obtain promises on the issue of the price of gaz and export taxes on oil, around which tensions are mounting, capable of destroying not only the customs union but also political relations between the two countries", the newspaper added.

The Russian government has also announced that it will tax its oil exports to Belarus.

Source:

http://www.iii.co.uk/news/?type=afxnews&articleid=5898512&subject=economic&action=article