BELARUS NEWS AND ANALYSIS

DATE:

11/01/2011

Russia's Transneft agreed to Belarus oil tariff hike

MOSCOW Jan 11 (Reuters) - Russia's Transneft (TRNF_p.RTS: Quote) agreed to a 12.5 percent increase in the tariff charged by neighbouring Belarus to ship Russian oil across its territory, a spokesman for the Russian oil pipeline monopoly said on Tuesday.

Relations between Russia and Belarus have been strained in recent months and analysts have warned that the re-election last month of Belarussian President Alexander Lukashenko could lead to a more assertive stance from Minsk.

"The increase in price was agreed with the Belarussian side at the end of December," Transneft spokesman Igor Dyomin told Reuters. "We agreed to this increase because in Belarus there was a sharp increase in the cost of electricity."

The Belarussian Economy Ministry said late on Monday the tariff would rise from Feb. 1 due to "changes in the economic conditions of oil deliveries to Russia." [ID:nLDE7091RL]

Rows over prices and transit tariffs between Moscow and its neighbours, Belarus and Ukraine, have led to Russian oil and gas supply stoppages to Europe in the past.

Around 40 million tonnes (about 800,000 barrels per day) of Russian oil is pumped annually to Europe via Belarus.

Low gas and oil prices from Moscow are crucial for Lukashenko's efforts to keep the ailing economy afloat.

Minsk has asked Russia not increase gas prices for 2011 to $210-$220 per 1,000 cubic metres, as Moscow had indicated. Belarus currently pays just over $190 per 1,000 cubic metres compared with $308 for Europe on average.

A dispute with Minsk over transit tariffs and gas payments triggered a four-day standoff between Russia and Belarus and resulted in a cut in gas supplies to Poland and Lithuania in summer 2010.

The two Slavic countries in December agreed on oil supplies after creating a free-trade zone between Russia, Belarus and Kazakhstan.

The agreement set out the terms for the transit of Russian oil across Belarus, but did not deal with the thorny issue of gas sales to Belarus, which enjoys the cheapest gas of any ex-Soviet state. [ID:nLDE6B81I2] (Reporting by Vladimir Soldatkin; writing by Melissa Akin)

Source:

http://af.reuters.com/article/energyOilNews/idAFLDE70A0LA20110111

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