Belarus says Russia has agreed to scrap duties on oil it supplies to the country from Jan. 1.
Belarusian President Alexander Lukashenko said in televised comments Thursday that his government in turn has agreed to pass on to Russia the export duties it charges on products it makes from the imported Russian oil.
Moscow earlier insisted that it would scrap duties only for oil supplied to Minsk for its domestic needs, but has now agreed to broaden that to all oil exports to Belarus.
The agreement, thought to be worth up to $4 billion to the Belarusian economy, comes a week before presidential elections in which Lukashenko is a candidate. The authoritarian leader is unlikely to allow rivals a serious chance to end his 16-year reign as president.
Thursday's deal was inked as Russian, Belarus and Kazakhstan agreed to create a fully fledged customs union by 2012.