BELARUS NEWS AND ANALYSIS

DATE:

11/01/2007

Russian-Belarus oil row thaws

MOSCOW, Jan. 11 Belarus blinked in its dispute with Russia by lifting a transit tax on oil that would allow the resumption of oil deliveries to Europe.

The Moscow Times reports officials said Wednesday they expected the taps to the Druzhba pipeline, which carries Russian crude to Europe through Belarusian territory, would be turned on a day later.

On Monday, the Druzhba pipeline was closing, cutting off Russian oil supplies to Germany, Poland, Hungary, Slovakia and the Czech Republic.

Last week, Minsk imposed a $45 a ton fee on westward transit of Russian crude oil.

The move came after Gazprom, the state-controlled Russian energy giant, struck a five-year natural gas deal late Dec. 31 that narrowly averted a shut-down of supplies scheduled for the morning hours of Jan. 1.

The new contract more than doubles the price of natural gas for Belarus in 2007 to $100 per 1,000 cubic meters, and adds that gas prices will rise gradually to bring them in line with other countries in Europe by 2011, prompting the Belarusian retaliation on Russian oil. Most of Europe pays $235.

As part of the deal Gazprom pays $2.5 billion for a 50 percent stake in the the Belarusian pipeline network.

Belarusian President Alexander Lukashenko and Russian President Vladimir Putin agreed to the truce Wednesday via a phone conversation. The two countries' prime ministers are to develop a long-lasting plan and submit it to the presidents by Friday.

Source:

http://www.earthtimes.org/articles/show/19260.html