Moscow - Russia has begun cutting gas deliveries to neighbouring Belarus in the latest escalation of the two countries' dispute over unpaid bills, Interfax reported Monday.
The agency said President Dmitry Medvedev had sent directions to Alexei Miller, the boss of gas monopoly giant Gazprom to start cutting the deliveries.
The move increases Moscow's pressure on Belarus to come up with back payments of 192 million dollars for previous gas deliveries in a dispute which has been brewing for the past several days.
'Belarus recognises its gas debts, but is proposing to pay them with machinery, equipment and other goods,' Miller said. But Medvedev is insistent that Minsk must pay the bills in 'hard currency.'
Last week Gazprom had announced its aim to reduce by 85 per cent its gas deliveries to Belarus, with Minsk then threatening over the weekend to tap into the transit pipelines transporting gas to western Europe.
Gazprom said that if Belarus took such action, the company would then pump its gas via Ukraine into Poland, circumventing Belarus. Gazprom would meet its delivery commitments to the West, Miller said.