BELARUS NEWS AND ANALYSIS

DATE:

18/12/2006

Lukashenko Finds Gas Talks Tough

By Anna Smolchenko and Anatoly Medetsky

Staff Writers

Dimitry Astakhov / Itar-Tass

Lukashenko gesturing during his talks with Putin in the Kremlin on Friday, which expanded beyond the official agenda.

Belarussian President Alexander Lukashenko said after Friday's talks with President Vladimir Putin that they had found a common approach to fuel prices for Belarus but skipped a joint dinner with his Russian counterpart.

Belarus' economy faces a huge jolt in January, when Russia has said it will remove the country's exemption from oil export duties and hike the price for gas supplies to European levels.

In an effort to lower the proposed oil export duty, set at $180 per ton, Lukashenko -- whose country angered Russia by drawing large revenues from refining and re-exporting Russian oil -- proposed paying most of the revenues to Russia. Belarus offered to return about 70 percent of such income to Russia and asked to keep the rest, said Valery Sadokho, economic adviser at the Belarussian Embassy.

It was unclear Sunday whether Gazprom and Belarus had come to terms on the valuation of Beltransgaz, the Belarussian gas-pipeline operator. Gazprom has said it will hike the gas price for Belarus to $200 per 1,000 cubic meters unless it can buy part of Beltransgaz.

The two leaders' meeting was dedicated to the largely dysfunctional union state of Russia and Belarus but it lasted as long as three hours due to the oil and gas issues that Lukashenko said were not on the official agenda.

"We thought we'd have to skip some issues that are much written and spoken about, but as a result of our hard and lengthy negotiations, it seems we have found ... a thread that we can seize at," a tense-looking Lukashenko said after the talks. "I think that we can shortly remove a lot of questions that have become hard for us."

Before the meeting started in a Kremlin room ornately decorated in green, Putin looked pleased and relaxed, while Lukashenko appeared somewhat tense. Putin appeared to have lost some of his light mood after the talks.

State Duma Speaker Boris Gryzlov, whom Lukashenko congratulated on his birthday Friday, will head a Duma delegation to Minsk for a further round of talks Wednesday, he said Sunday, Interfax reported. Lukashenko wished Gryzlov "successes, happiness, health and political longevity."

After the Kremlin meeting, Lukashenko headed home early, skipping a scheduled dinner with Putin and a joint trip to a new ice rink at the Khodynka field, Kommersant reported Saturday. Lukashenko is a renowned ice hockey enthusiast.

Russia and Belarus could sign an oil export duty deal at a government meeting Friday, a Belarussian delegation official said, Itar-Tass reported.

The 70 percent to 30 percent ratio was almost settled, he said. "The main thing now is to agree with the Russian side on the level of the oil export duty," said the official, who was not identified.

Sadokho, the Belarussian economic adviser, insisted that Russia needed an agreement on oil because it did not have sufficient refining capacity.

Source:

http://www.moscowtimes.ru/stories/2006/12/18/045.html