BELARUS NEWS AND ANALYSIS

DATE:

17/12/2007

Belarus Will Pay 19% More for Gas

MINSK -- Belarus will pay 19 percent more for Russian gas beginning next year, Gazprom said Saturday, a day after President Vladimir Putin announced $1.5 billion in loans to help its economy adjust to rising prices.

The announcements came after Putin paid a two-day visit to Minsk, which yielded no signs that the two countries were inching toward a full merger.

Following a dispute over energy prices at the beginning of the year, Gazprom forced Belarus to accept a doubling of gas prices this year -- to $100 per thousand cubic meters -- and an unspecified increase for 2008.

Sergei Kupriyanov, a spokesman for Gazprom, said Saturday that Belarus would pay $119 as of next year.

Belarussian government officials refused to comment on the announcement, but the increase was apparently less than what they had feared. Minsk government sources had earlier said Moscow was seeking an increase of up to 60 percent for 2008. Lawmakers on Thursday passed a 2008 budget that forecast a price of $125.

In announcing the $1.5 billion loan during his visit to Minsk on Friday, Putin promised that rates would not rise beyond gradual increases set out last year.

In recent years, Gazprom has moved to end energy-supply subsidies to former Soviet republics; several countries, including Georgia, Ukraine and Azerbaijan, have seen sharp hikes in prices, and some critics accuse Russia of using energy prices to punish Western-leaning governments.

Putin's visit to Belarus produced calls for closer cooperation but yielded no signs that the neighbors were moving toward the creation of a unified state. The two countries signed an agreement in 1996 that envisioned close political, economic and military ties, but efforts to achieve a full merger have foundered.

Before Putin's arrival in Minsk, there had been intense speculation that he could be seeking to use the union to provide him with a power base after he steps down as president next year. But at the talks, President Alexander Lukashenko dismissed this.

"I was surprised to see the visit triggered such a fuss in the West," Lukashenko said. "There are no political connotations here. We are friendly and allied states, and I would be surprised if there was no official visit. ... There is nothing extraordinary here."

Lukashenko also repeated an earlier statement that Belarus would join forces with Russia in opposing U.S. plans for a missile shield in Europe.

"Belarus is ready to play its role in the issues of planned deployment in Europe of U.S. missile defense systems," he said.

He did not say what form his country's assistance might take, but a Russian general last month suggested deploying missiles in Belarus in retaliation for the proposed U.S. missile shield.

Arkady Dubnov, a political commentator for Vremya Novostei, speculated that Putin had sought Lukashenko's support for a deployment of Russian forces in Belarus, which hosts a Russian-operated early-warning radar system and a limited number of Russian military personnel.

AP, Reuters

Source:

http://www.moscowtimes.ru/stories/2007/12/17/011.html