BELARUS NEWS AND ANALYSIS

DATE:

05/01/2007

Belarus, Russia may hold talks on oil dispute next week

MINSK, Belarus: Belarusian Prime Minister Sergei Sidorsky plans to hold talks in Moscow next week to defuse a dispute with Russia over oil supplies and transit of the commodity across Belarus, his office said Friday.

With a politically charged trade war heating up between the neighboring former Soviet republics, a Russian official indicated that Moscow was open to talks, but would not submit to a Belarusian demand that it pay an import duty for Russian oil that transits the country on its way to Europe.

Sidorsky will arrive Wednesday in Moscow for talks, his office said. Russian Deputy Trade Minister Andrei Sharonov said Russia saw the planned visit "as a sign of readiness for negotiations," but was not prepared to pay the import duty, the Interfax news agency reported.

Belarus, angry over Russia's imposing a duty on oil exports to Belarus and doubling its price for natural gas, announced Wednesday that it would impose an import duty of US$45 (?34) per metric ton of oil that Russia ships across its territory.

The announcement appeared aimed at prompting Russia to reconsider the oil export duty, which Belarusian officials said made Russian oil too expensive. A government statement Friday suggested Belarus was prepared to scrap the duty, which amounts to a transit fee, if Russia backed off on the oil export duty or eased its impact.

"The Belarusian side is prepared to conduct a constructive dialogue on resolving oil supply issues, right up to the cancellation of the introduction of compensatory measures if the conditions that prompted them are removed," the statement said.

Belarus profited for years by importing Russian oil duty-free, processing it and selling the products abroad. Faced with the Russian duty, they have indicated they are prepared to equally share profits from oil product sales.

The energy supply and price disputes reflect seriously strained relations between Belarus and Russia, which are linked by centuries of common tradition and pledged a decade ago to tighten ties further by forming a union.

Russian President Vladimir Putin's Kremlin has apparently grown weary of providing support for Belarus' authoritarian President Alexander Lukashenko, who has balked at ceding Moscow more control over his nation and its economy.

An angry Lukashenko asserted Wednesday that he had agreed to an unfavorable gas deal - whose 11th-hour signing averted a threatened New Year's Day supply cutoff - because Russian officials had said reaching a gas agreement would help resolve conflicts over trade in oil and sugar.

Source:

http://www.iht.com/articles/ap/2007/01/05/business/EU-FIN-Russia-Belarus.php

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