Belarus hikes Russian oil transit tariffs by 50% in energy dispute

By bne IntelliNews October 3, 2016

Belarusian authorities will increase tariffs for Russian oil transit through the country’s pipeline network by 50% amid a snowballing energy dispute between the neighbours.

A special decree was signed by the Belarusian Ministry of Antitrust and trade on September 28 and published on the National Legal Internet Portal on October 1. The new tariffs affect oil transportation through pipelines from Russia to EU countries, and will come into force 10 days after their official publication.

The government gave no explanation for the sharp increase in the fees, the last increase occurring on February 1, 2016, when they rose by 10.4%. But the move followed a statement by President Alexander Lukashenko warning the Russian leadership against applying further pressure on his country over natural gas and oil supplies. “We perceive it as pressure on Belarus. But I will not tolerate any pressure,” Lukashenko said on September 20.

Since the start of July, Russian oil pipeline monopoly Transneft has pumped 40% less oil to Belarusian refinaries than in the second quarter of 2016 because of Minsk’s alleged $270mn debt to Russian natural gas producer Gazprom for past supplies.

On October 2, Transneft spokesman Igor Demin described Belarus' move as “unilaterally adopted, which violates both provisions of intergovernmental agreements and previously agreed method (mechanism) of tariff changes, Russian media reported.

Minsk buys Russian natural gas at a price of $132 per 1,000 cubic metres, but says it regards $73 as a fair price. In May, the Russian energy giant’s subsidiary Gazprom Transgaz Belarus said it was forced to file a lawsuit to the Court of Arbitration at the Belarusian Chamber of Commerce and Industry against government-controlled regional gas distribution companies, which it says did not pay for gas volumes supplied.

According to the subsidiary, it is protecting its interests in court under the terms of contracts signed with the Belarusian side. Minsk previously rejected the existence of any debt, citing several bilateral agreements reached in 2011 and the Treaty on the Establishment of the Eurasian Economic Union (EEU) signed in May 2014.

Russian state-owned oil transport monopoly Transneft considers that the increase of tariffs for Russian oil transit as violation of previously secured agreements.

The scandal happened almost simultaneously with a statement by Russian Deputy Prime Minister Arkady Dvorkovich that Minsk and Moscow will have the next round of gas price talks in the coming days. “[The talks will resume] at the start of next week,” TASS news agency quoted Dvorkovich as saying on October 1. “A search for an acceptable solution is underway. A discount [for Belarus] is not under discussion.”

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