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Russia to preserve trade preferences for Belarus

Posted by Kris Roman on July 1, 2009

putin_in_belarus

European Friends of Belarus

Russia intends to preserve trade preferences for Belarus despite the switch of world energy prices, Prime Minister Vladimir Putin told parliamentary group leaders on Sunday.

Belarus is the only country enjoying preferences in trade with Russia, he said. “Thanks to the low price Belarus pays for Russian crude and petroleum products, it has become a leading exporter of oil and gas derivatives to Europe. We will keep the price in the near future alongside the trend towards world energy prices,” he noted.

Belarusian First Deputy Prime Minister Vladimir Semashko said on Friday that Belarus hoped to retain current terms of Russian crude imports in 2010. “We have begun a new round of negotiations on Russian crude imports,” he said.

Minsk hopes the decision will be made in October or November.

Belarus offers Gazprom to legalize the average yearly gas price at $150 per 1,000 cubic meters, Semashko said. “We strictly comply with agreements and pay $150 per 1,000 cubic meters of gas. We will start paying earlier debts in the second half of the year,” he noted.

Being a member of the Russia-Belarus Union State, Belarus pays the smallest price for Russian energy resources, ITAR-TASSreports.

Gazprom announced on Friday it had sent Belarus a letter demanding it pay $244 million in gas debts, and warning that supplies could be cut if the sum is not cleared.

The debt has arisen due to differences between contract and average prices. In the first quarter Belarus paid $210 per 1,000 cubic meters, but by the end of the year this figure should have dropped to under $100. In line with verbal agreements the price should average out at $150 per 1,000 cubic meters.

Belarusian First Deputy Prime Minister Vladimir Semashko said on Friday that the government expects Russian gas prices to reach $166 per 1,000 cubic meters on January 1, 2010 if oil prices remain around the $70 per barrel mark this year. The rate is still well below the average rate Russia charges European Union countries for its gas, rian.ru reports.

The countries have in the past also clashed over Russian oil sales to Belarus, which had also been heavily discounted until the end of 2006. After Russia raised the oil price for Minsk, while keeping it below international prices, Belarus imposed a tariff on oil pipeline transit via its territory, triggering a temporary cut-off in early 2007.

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