BELARUS NEWS AND ANALYSIS

DATE:

23/01/2007

Belarus to demand Russia pay rent for land under gas, oil pipes

MINSK, January 23 (RIA Novosti) - Belarus will demand that Russia pay rent for land under pipelines that it uses to pump its oil and gas to Europe, the country's president said at a government meeting Tuesday.

The ex-Soviet state tried to instate a transit levy on Russian oil passing through its territory at the beginning of the year, in retaliation for new charges imposed by Moscow, but relented after Russia halted crude supplies.

Alexander Lukashenko said, "Without fuss or ambitions, we will take corresponding measures in line with international law, and will demand that they pay us."

The oil standoff began when Russia hiked the natural gas price to Belarus and slapped an export duty on oil supplies to the country, causing Minsk to impose its transit fee on Russia's Europe-bound crude. The move led to a three-day stoppage of supplies to Germany and Central Europe. During the spat, Moscow accused Minsk of tapping oil as payment for transit services.

Lukashenko called all agreements with Russia unfavorable for Belarus compared to last year. He said his country will have to pay $2.5 billion extra for gas supplies and $1 billion more for oil supplies.

The recent row was resolved after Belarus lifted its transit duty, and Russia later cut its export duty from $180.7 to $53 per metric ton, avoiding potentially crippling economic consequences for its neighbor, which relies heavily on receipts from refining and re-exporting Russian oil.

Russia has complained of huge losses inflicted on its budget from crude supplies to its western neighbor. Belarus refines Russian oil and re-exports it to third countries, and has until now paid no taxes to the Russian budget in the process.

Although the ex-Soviet neighbors declared their intention in 1997 to build a Union State envisaging a common economic, customs and political space, the negotiations have been complicated by a host of issues, brought to a head by the energy clash.

Russia has traditionally been the closest ally of Belarus, whose leadership has become increasing isolated in the West over clampdowns on civic and political freedoms. The country's authoritarian ruler Alexander Lukashenko, as well as many top officials, have been banned from entering the United States and European Union, and the EU has frozen Belarusian government assets.

The Belarusian president told his government that there are no winners in the dispute with Russia.

He said that while Russia possesses oil and gas reserves, Belarus has an advantageous geopolitical situation, which it should use in the same way that Russia uses its reserves. However, the president urged against "quarrelling with Russia."

Lukashenko set his government the task of seeking alternative oil supply sources, and urged measures to prevent the price increases from harming the population.

Source:

http://en.rian.ru/world/20070123/59573402.html