BELARUS NEWS AND ANALYSIS

DATE:

16/12/2007

Belarus to pay more for Russian gas in 2008

MINSK, Belarus (AP) -- Belarus will pay nearly 20 percent more for Russian gas beginning next year, Russia's state-controlled gas monopoly said Saturday.

The statement came one day after President Vladimir Putin announced $1.5 billion in loans to help the Belarus economy adjust to rising prices.

Sergei Kupriyanov, a spokeswoman for Russian giant OAO Gazprom, said Belarus would pay $119 per thousand cubic meters next year, up from the $100 per thousand cubic meters Russia forced Belarus to accept when it doubled gas prices for Belarus at the beginning of 2007.

Belarusian government officials refused to comment on the announcement, but the increase was apparently less than what the government feared. Lawmakers on Thursday passed a 2008 budget that forecast a price of $125 per thousand cubic meters.

In announcing the $1.5 billion loan during a visit to Minsk this week, Putin promised that rates would not rise beyond gradual increases set out last year.

In recent years, Russia has moved to end energy supply subsidies to former Soviet republics. Several countries, including Georgia, Ukraine and Azerbaijan, have seen sharp hikes in prices, and some critics accuse Russia of using energy prices to punish Western-leaning governments.

Belarus, whose heavily subsidized, Soviet-style economy is dependent on cheap Russian supplies, had sought to use its location as a transit country to negotiate a better deal. But disputes over both gas and oil prices resulted in disruptions of Russian supplies.

Ultimately, to pay its bills, Belarus was forced this year to sell half of its national gas pipeline company to Gazprom.

"The increase in energy prices will sharply increase inflation in the country and slow economic growth,'' political analyst Alexander Klaskovsky said.

Putin's visit to Belarus prompted calls for closer cooperation, but yielded no signs the ex-Soviet neighbors were moving toward the creation of a unified state. The two countries signed an agreement in 1996 that envisaged close political, economic and military ties, but efforts to achieve a full merger have foundered.

Source:

http://www.dailymail.com/News/200712150537