BELARUS NEWS AND ANALYSIS

DATE:

14/04/2006

Belarus: Russia won't raise price of gas

APR. 14 12:35 P.M. ET Belarusian President Alexander Lukashenko expressed confidence Friday that Moscow will not significantly raise the price his country pays for Russian gas, a defiant statement that followed warnings that the rate could skyrocket next year.

"I don't think the Russian leadership will take the step of a serious increase in gas prices," Lukashenko said, dismissing statements from Russia's state-controlled gas monopoly Gazprom about potential price hikes as meaningless "chatter."

Gazprom has raised prices this year for other former Soviet republics, but has maintained a rock-bottom rate of roughly US$47 (euro39) per 1,000 cubic meters for ally Belarus -- a decision widely seen as politically-motivated support for the authoritarian leader who won a third term last month in a widely dismissed as undemocratic and fraudulent.

Shortly after the vote, Gazprom officials said Belarus should pay European rates, and a deputy chairman of the company called for at least a threefold increase in the price.

Many analysts have interpreted the move as a ploy by Moscow to acquire control over Belarusian pipeline operator Beltransgaz, which carries Russian gas to lucrative Western markets.

Lukashenko depends heavily on cheap Russian gas and oil to buoy his nation's fragile, largely centrally-controlled economy and maintain popularity in the nation of 10 million, where anger over the election that extended his iron-fisted 12-year rule sparked unprecedented street protests and further isolated his government from the West.

Source:

http://www.businessweek.com/ap/financialnews/D8GVSV3O0.htm?campaign_id=apn_home_down&chan=db