Gref Rejects Minsk's Transit-Fee Warning

By Anatoly Medetsky

Staff Writer

Economic Development and Trade Minister German Gref said Tuesday that Belarus could raise its transit rates for oil only with Russia's agreement.

Belarus on Monday announced plans to hike the rates, which had remained the same since 1995, by one-third as of Feb. 15. The move came after Russia began charging Belarus twice as much for gas deliveries and introduced export duties for oil sold to the country starting last month.

"It is possible only through signing a bilateral agreement," Gref said, Interfax reported. "If we are notified in time and if we hold bilateral talks, then the change is quite possible."

The oil price for European consumers will not increase because of the potentially higher transit cost, Transneft vice president Sergei Grigoryev said Monday, apparently suggesting that the hike would be passed on to oil companies, Itar-Tass reported.

Transneft had not been formally notified about the possible hike but company president Semyon Vainshtok said he had heard about the planned rise, Interfax reported Monday.

The Belarussian Economy Ministry raised the transit rate from $2.60 to $3.50 per ton of oil going to Poland and from $1.14 to $1.50 for oil going to Ukraine.

The increase means that Transneft will have to pay an average transit fee of 60 cents per 100 kilometers for each ton of oil it transports through Belarus.

A spokesman for Transneft on Tuesday declined to say how much more the company would pay in transit fees if they were to go up. Considering that Transneft shipped 50 million tons to the Polish border and at least 25 million tons to the Ukrainian border last year, according to MDM Bank oil analyst Andrei Gromadin, Belarus would collect at least $54 million in extra revenues.

The country's budget is expected to lose $3.5 billion annually as a result of the higher Russian energy prices, Belarussian officials have estimated.

Transneft shipments crossing Belarus through the Druzhba pipeline account for one-third of the company's entire exports. The company cut supplies for three days last month after Belarus imposed a transit duty of $45 per ton, a standoff that caused alarm at refineries in Central Europe.

In an effort to offset potential losses from the higher energy prices, Belarus is also seeking to raise $1 billion in foreign loans, negotiating them with eight banks, Belarussian Finance Minister Nikolai Korbut said Monday, Reuters reported.