Lukashenka Accuses Russia of Backtracking on Oil Delivery Agreements

Alyaksandr Lukashenka on January 13 sent a letter to Dmitry Medvedev in which he accuses Russia of backtracking on oil delivery agreements that were reached in December.

In late 2009, Belarus and Russia started unsuccessful negotiations on oil deliveries, the presidential press office quotes Mr. Lukashenka as saying in the letter. "At the same time, under an agreement reached by the presidents of the two countries during a meeting of the Supreme State Council of the Union State of Belarus and Russia on December 10, 2009, oil was to be delivered to Belarus in the first two or three months of 2010 free of [export] duty and the sides and the sides were to agree in the meantime the conditions of future deliveries. However, the Russian Federation subsequently abandoned the agreements and put forward conditions that were unacceptable for Belarus."

The latest round of talks on oil deliveries held by Belarusian and Russian government officials in Moscow on January 9 ended in failure, and it was not known on Monday morning when the talks could resume.
The weeks-long negotiations have repeatedly broken down, resulting in a brief interruption in oil deliveries to Belarus earlier this month.

Alyaksandr Tsimashenka, spokesman for the Belarusian prime minister, said last week that Belarusian negotiators had presented their arguments "based on the legal framework for bilateral relations and substantiated by calculations that had been agreed upon by experts."

A Russian oil industry expert told RIA Novosti on condition of anonymity that Belarus might lose the "offered concessions" if it dragged out the talks. According to him, Russia suggests delivering 6.3 million tons of oil to Belarus free of duty in 2010 for its domestic consumption.

Minsk threatens to raise the oil transit fee from $3.5 to $45 a ton if Russia does not increase the amount of duty-free oil to 30 million tons, the expert said.

By applying a reduced duty rate to its oil deliveries, Russia has provided Belarus with about $10 billion in subsidies between 2007 and 2009, the expert noted.

Russia announced that Belarus would be charged the full duty rate starting January 1 because no agreement on oil trade between the two countries had been reached.

Under an interstate agreement that was signed on January 12, 2007 and expired on December 31, 2009, crude oil exported to Belarus was subject to reduced export duty, which was 35.6 percent of the rate applied to oil exports to other countries.

Late last year Russia offered to supply up to six million tons of oil to Belarus free of duty in 2010 for its domestic consumption. An agreement was reached for Belarus to receive a total of 21.5 million tons of oil in 2010 and Moscow wanted the amount to be supplied in excess of the six million tons be subject to the full duty rate, warning that if a new agreement on the terms of oil deliveries failed to be signed, all oil supplied to Belarus would be subject to the full duty rate starting January 1.

Minsk reportedly demanded that all Russian oil to be supplied to Belarus be exported duty-free, explaining that this would meet the spirit of agreements recently reached by Belarus, Kazakhstan and Russia to form a customs union.

Igor Sechin, Russia's deputy prime minister, confirmed earlier this week that crude oil had not been supplied to Belarus in the first two days of January because of the dispute.