BELARUS NEWS AND ANALYSIS

DATE:

02/01/2007

Belarus, Russia to finalize agreement on sharing export oil duties

MINSK, January 2 (Itar-Tass) - Belarus and Russia are expected to finalize an agreement on sharing export duties for petroleum products this January, Belarusian Prime Minister Sergei Sidorsky told journalists late on Monday after meeting Russian Prime Minister Mikhail Fradkov.

Sidorsky said experts would get down to work on the document on Tuesday, January 2. According to him, the sides have so far failed to agree on proportions in which the duties will eventually be shared. Russia has suggested a 50%-50% division.

'We endorsed that proposal and handed it back to the Russian government," Sidorsky, who attended the final stage of gas talks with Russia's Gazprom, said. Though he described the proposal as "unprofitable for Belarus", he noted Belarus would agree to the proposal if it were offered to accept it.

On December 30, 2006 the Belneftekhim concern suspended oil delivery contracts that were concluded with Russian oil companies for 2007 because it claimed Belarus benefits nothing from the purchases. Belneftekhim's President Alexander Borovsky then told reporters that the company's actions followed Russia's decision to increase customs duties for exporting Russian oil into the republic.

"Under such circumstances Belarusian oil refineries will suffer millions of dollars worth of losses, and we decided to suspend the earlier concluded contracts with Russian firms," Borovsky went on to say, adding a customs duty worth $180.7 per ton of oil was inadequate.

Experts have estimated Russia doesn't receive about $4 billion worth of currency revenues because of a difference in export duties for petroleum products in Russia and Belarus.

A Russian government resolution of December 8 that went in force on January 1, 2007 abolishes preferential export duties for oil taken to Belarus and introduces common rates of export customs duties for crude oil and crude petroleum products which Russia exports to Belarus. They stand at $180.7 per ton of crude oil, $134 per ton of light oil and $72.2 per ton of dark-oil products.

The decision to abolish preferential export duties is designed to protect Russia's economic interests. Belarus submitted its own draft agreement for sharing export oil duties. Russian Prime Minister Mikhail Fradkov has ordered the Russian government to consider the document before January 17, 2007. The Belarusian side suggested dividing the export duties by 50% to 50% or by 60% to 40% between the budgets of the two countries on condition that duties for the crude oil exported to Belarus should be cancelled.

Source:

http://www.itar-tass.com/eng/level2.html?NewsID=11131883&PageNum=0