BELARUS NEWS AND ANALYSIS

DATE:

18/12/2008

Belarus seeks Russian understanding in gas deal

MINSK, Dec 18 (Reuters) - President Alexander Lukashenko hopes Russia will take into account Belarus's economic circumstances in talks on clinching a deal on 2009 gas prices and supplies, he said in comments to be broadcast on Thursday.

Lukashenko, interviewed by Belarussian television channels, did not say what price he hoped to secure at a meeting scheduled for next Monday with Kremlin leader Dmitry Medvedev.

Belarussian officials had previously said they were counting on a price of $160 per 1,000 cubic metres compared with the current rate of $128. Russian officials have suggested the price will be no less than $200.

"We will hold talks with Russia so that they understand that if demand falls for our goods, we will be unable to pay," Lukashenko said in comments published in advance by the official BELTA news agency.

"If we fall into a pit of debt, is this a good thing for Russia? I would not like Russia to solve its problems at the expense of Belarus. Russia has a great interest here in many spheres from defence to economic and social issues. And it is in Belarus's interest to secure oil and gas supplies."

Under an agreement signed by the neighbours in 2007, Belarus is to pay 80 percent of the average European gas price by 2009. Officials in Minsk have also said gas prices should take account of oil prices, now in decline after what they described as "speculative" increases earlier in the year.

Belarussian news reports quoted Gazprom Deputy Chief Executive Alexander Medvedev as saying the price of gas would be determined by the existing contract.

A more than two-fold increase in the price of gas last year prompted a rise in inflation, which hit 12 percent in the first 11 months of the year compared with 9.4 percent a year ago.

"The situation is such now that the entire world is joining forces. Only together can we overcome these difficulties," BELTA quoted him as saying. "And who else, other than with Russia, can we unite with to overcome the difficulties and survive today?"

Belarus has nurtured close post-Soviet links with Russia and still promotes the creation of a "union state" with its eastern neighbour, though both sides appear to have cooled to the idea.

Lukashenko has long been accused in the West of violating fundamental rights in his country of 10 million, but has tried in the past year to improve ties. (Reporting by Andrei Makhovsky, writing by Ron Popeski; editing by Sue Thomas)

Source:

http://in.reuters.com/article/asiaCompanyAndMarkets/idINLI76076420081218

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