Ben Aris in Berlin -

It would be funny if the dark side of Belarusian politics wasn't actually so nasty. The country's president, Alexander Lukashenko, slated the Kremlin Tuesday in the aftermath of a dispute over oil duties and said his republic would seek closer ties with the West.

Speaking at ceremony where he was awarding doctoral diplomas to scientists, Lukashenko surprised observers by holding up the West as an economic model. He said there is no crisis in Belarus and no need to "tighten belts" - contradicting a call last week for Belarussians to prepare for hardships. He added that, "We should come up with a frugal solution to the problems we encounter. We do not have to invent anything. We could borrow from Finns, Swedes, Germans and French. Even Poles have made headway in this regard."

US Secretary of State Condoleezza Rice dubbed Lukashenko, a former collective farm manager, "the last dictator in Europe" last year and clearly his authoritarian style of rule runs directly counter to the US administration's "freedom" mission of promoting democracy around the world.

And ties with the EU are non-existent. Relations with Poland, where any push towards detente would have to begin, are particularly bad; the biggest ethnic minority in Belarus is Polish and Poland's government has been actively working against Lukashenko's regime. Only last week, a Polish parliamentarian was denied a visa to enter Belarus and the Foreign Ministry is backing the Belarusian opposition which two weeks ago started broadcasting to its fellow citizens by radio from a small town on the border between the two countries.

New supplies from new friends

In the wake of the oil fracas, Minsk has started looking for alternative oil supplies. Lukashenko ordered the government on 23 January to set up a state petroleum company patterned on the successful Belarusian Potash Company, which would deal with purchases of crude oil and sales of petroleum products. And in an ironic echo of the EU's fears, said the state needed to ensure its "energy security" by seeking alternative sources of oil. "Without it, a sustainable and secure operation of our oil refineries is hardly possible," the president said at cabinet meeting on the same day.

The government is now looking into the possibility of supplying Belarusian refineries with oil via Baltic ports through the Ventspils-Navapolatsk pipeline, First Deputy Prime Minister Uladzimir Syamashka said last week.

There is a possibility of another showdown with Moscow as Lukashenko is hunting for a way to reclaim the money lost under the terms of the new deal. He has already called for Russia to buy the land under the oil pipelines that Moscow took possession of as part of the settlement.

"Neither Russia nor Belarus was victorious" in the oil conflict, Lukashenko told his cabinet last week. "As a result we have a specific oil price which is beneficial for both the business and the budget." He said Belarus will pay $2.5bn more for gas and $1bn more for oil, and stressed that "we should not lose this $3.5bn."

However, Lukashenko finds himself between a rock and hard place. Minsk has been able to ignore the rest of Europe for the last 15 years as long as Russia was a loyal ally. Moscow has been doling out subsidies in the form of cheap gas and oil to the tune of $3bn-4bn a year. And as a member of the Customs Union with Russia and Kazakhstan, Belarusian products (which have been getting better) had a ready and huge market - enough to keep the economy growing at about 9% for the last few years, one of the best growth rates in the CIS.

That is all set to change now that Moscow is asking for real prices for its energy. According to diplomatic sources who attend meetings between Vladimir Putin and Lukashenko, the Russia president can't stand his counterpart. More importantly, it seems the Kremlin is so confident of victory in the upcoming parliamentary and presidential elections that it no long sees the need to play the "union" card in its campaign: a proposed reunion between the two countries plays very well with the Russian electorate. Cold shouldered by Moscow, Minsk has no where else to turn.

"We admit that the multi-directional foreign policy declared in Belarus has in fact been a mono-directional one. It is of utmost importance for us to establish good relations with the West. The conflict [with Russia] is not a reason for such a move. Europe has seen that it is dependent on Belarus in terms of energy. Europe has re-assessed Belarus and a new situation has emerged," Lukashenko said this week at a meeting with the leader of the Communist Party of the Russian Federation, Gennady Zyuganov.

The president said that Belarus will no longer "rush headlong" into Russia's arms and added that the country has been experiencing a "massive onslaught" by Moscow for several years. "What country can stand two, two-fold gas hikes within the space of two years?" Lukashenko asked, omitting to mention that under the terms of the new deal Belarus still enjoys the cheapest prices of all Russia's customers and half of what many other CIS countries are being asked to pay.

He also said Belarusian refineries are losing $90 per tonne of processed oil now that they have to purchase Russia oil at higher prices, again omitting to mention that refining at the relatively modern Belarusian refineries is still the cheapest option for Russian oil producers.

"Belarus is being stifled and hounded. We are being put down…under orders from the Kremlin. I know it for a fact," he said in a statement that would under other circumstances resonate with European politicians.

Lukashenko claimed he was barred from speaking to a leading Russian news agency on the eve of a recent trip to Moscow. "This is what Russian-style democracy amounts to and that is how the Russian leadership is behaving," he said.

Despite Lukashenko's bluster, any attempt to bolster or, more accurately, create ties with Brussels will fall on deaf ears until the autocratic and erratic president shows he is prepared to entertain some form of democracy.

However, he seems to be working in the opposite direction. In the midst of the oil spat with Moscow, the president made his son Viktar a member of the National Security Council, sparking speculation he is signalling to the Kremlin that his elder son is a possible successor and there will be no change of policy should he retire.

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