By Yuras Karmanau
MINSK, Belarus (AP) - The Belarusian prime minister canceled a planned trip to Russia on Friday to discuss a customs union between the two former Soviet nations amid a rift over energy prices.
Russia's Prime Minister Vladimir Putin was set to host talks on the issue with top officials from Belarus and Kazakhstan, but the Belarusian premier's office said he wouldn't attend. It did not give a reason.
Belarus has insisted that Russia provide it with cheap oil and gas as part of the customs union deal to come into force July 1, but Moscow has rejected the demand.
Putin's deputy in charge of energy, Igor Sechin, on Friday turned down Belarusian President Alexander Lukashenko's proposal to give Russia control of the nation's gas pipeline network and a top oil refinery in exchange for domestic prices on oil and gas.
Russia's Gazprom state-controlled gas monopoly previously bought a 50 percent stake in Beltransgaz, the holding company of the strategic transit network, as part of its efforts to strengthen control over gas export routes.
Sechin said that Gazprom paid what he described as the excessive price of $2.5 billion for the 50-percent stake and has yet to see economic benefits from the move, Russian news agencies reported. He said it was too difficult now to determine a reasonable price for a controlling stake.
Belarus' economy has been struggling to cope with rising Russian natural gas prices and excise hikes on Russian oil imports.
"Lukashenko has resorted to promises, threats and even blackmail while trying to get funds from the Kremlin, which Belarus' Soviet-style economy desperately needs," said Alexander Klaskovsky, an independent Minsk-based political analyst.
Russia is Belarus' main ally and sponsor, but relations between the two ex-Soviet neighbors have been strained by financial arguments. Lukashenko, who has ruled with an iron fist for 16 years, has accused the Kremlin of trying to subdue his country of 10 million people and to acquire key industrial assets.