BELARUS NEWS AND ANALYSIS

DATE:

17/10/2007

Russia may hike gas price more than Belarus expects

Reuters

MINSK, Oct 17 - Russia may raise its gas price for Belarus by at least 25 percent in 2008, more than the former Soviet country expects, Moscow's ambassador in Minsk said on Wednesday.

Suggestions Russia will impose steep price increases on Belarus and Ukraine cause worries in Western Europe, which gets a quarter of its gas from Russia via pipelines across the two countries, that a price row could lead to interrupted supplies.

Ambassador Alexander Surikov said Belarus may have to pay at least $125 per 1,000 cubic metres for Russian gas in 2008, up from $100 now.

"I am of the opinion that it will be $125-150, closer to $125," Surikov told reporters. Belarus had previously said it expected prices to rise by 15-20 percent.

In 2007, Russian gas export monopoly Gazprom more than doubled prices for Belarus following heated debates between the former Soviet neighbours.

The final price for 2008 has yet to be agreed, but last week Belarus said it had agreed with Russia to keep most of its 2007 deal terms unchanged.

It said, however, that the new price would be set at 67 percent of Gazprom's European price levels. As Gazprom currently charges its European clients an average of $250 per 1,000 cubic metres, this could potentially imply a huge hike for Belarus.

But industry sources have said the two sides were in fact referring to Gazprom's export prices for Poland excluding transportation costs and export duties, a lower figure.

Some analysts had forecast that Russia might raise the gas price for Belarus as high as $170, but Surikov dismissed the talk.

"These estimates are unlikely, we do not have such prices and will hardly have," he said. The final price would be set in December, he added.

In January 2006, several EU countries were briefly left with reduced supplies of gas after Russia cut exports to Ukraine in a price dispute.

Source:

http://beta.malaysia.news.yahoo.com/rtrs/20071017/tbs-russia-belarus-7318940.html

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