BELARUS NEWS AND ANALYSIS

DATE:

05/01/2007

U.S. Administration Sides With Russia in Belarus Oil Tariff Row

MosNews

On Thursday, Jan. 4, official representative of U.S. State Department Sean McCormack said that Belarusian government's decision to introduce transit duty on Russian oil going to Europe exposed the "rotten core" of Alexander Lukashenko's regime.

McCormack explained to reporters that previously Belarus has applied no oil transit tariff on Russian oil, just like Russia has exported its crude to Belarus with no special duties applied. The past practice of the Belarusian regime had been to take Russian oil free of export duty, refine it and then sell it at a clear profit overseas. Starting Jan. 1, 2007, Russia has imposed an export duty of about $50 per ton on crude shipments going to Belarus, so as to make this scheme unprofitable.

The U.S. official has named the new oil transit duty imposed by Belarus as just another example of the "rotten core" of this [Lukashenko's] regime and said that this scheme is being used "for the personal profit of those around the leadership of the Lukashenko regime".

While clearly denouncing the latest move by Belarus, McCormack said that Russia's use of energy resources as means of political pressure has to remind the Europeans of the need to diversify their energy sources. "They [Russians} are trying to use their energy resources as a political lever and most especially with those neighbor states. We saw it with Ukraine last year. We saw it with Georgia. We see it with Belarus now. And it's a very -- it's a lesson about the importance of maintaining and developing multiple sources of energy supply as well as multiple means to convey those energy supplies," McCormack stressed.

As MosNews has reported on Thursday, Jan. 4, Belarus has introduced oil transit duty of $45 per ton of Russian crude, in retaliation for being forced to pay a higher price of $100 per 1,000 cubic meters of Russian gas. Russian authorities have already said that the move won't hamper Russian oil exports to Europe, but the Russian Economy Ministry reminded the government of Belarus that the plan to impose transit duty contradicts the intergovernmental agreement on free trade that was signed on 1992 as well as the agreement on common transit conditions between members of the single customs union. The latter agreement was signed by Russia and Belarus in 1998. The Russian ministry also pointed out that the new transit rules "have no analogues in world practice since customs duties can only be applied to goods, which are either produced or consumed on the territory of the country that decides to introduce the tariff".

Source:

http://www.mosnews.com/money/2007/01/05/usbelarustransit.shtml

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