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Belarusian Deputy PM says Moscow will restore oil supplies to Belarus

October 10, 2016, 12:53 UTC+3

Crude supplies will be "fully restored before October 20, the deputy prime minister said

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© Yuri Smityuk/TASS

MINSK, October 10. /TASS/. Minsk will annul the decision on increasing tariffs on transit of Russian crude oil while Moscow will restore oil supplies to the Belarusian side, Deputy Prime Minister of Belarus Vladimir Semashko said Monday referring to the relevant agreement reached by the two countries.

"We’ve settled all current issues. You know that half of crude supplies to Belarus was blocked in the third quarter. We were to receive 6 mln tonnes (of oil - TASS) whereas now we virtually receive only 3 mln tonnes. Now (supplies - TASS) are about to be restored," he said, adding that crude supplies will be "fully restored before October 20."

According to Semashko, "there has been a slight increase in tariffs on oil transit". "We’re getting back the tariffs effective as of October 1," he said.

As was reported earlier Belarus’ Antimonopoly Regulation and Trade Ministry adopted a decree on September 28, 2016, raising tariffs for Russia’s oil transit through Belarusian pipelines by 50% starting October 11, 2016.

The Russian side has said the decision violates the existing agreements, which contain provisions of both the intergovernmental agreement and the agreed mechanism of tariff adjustments.

Gas price for Belarus 

The cost of Russian gas for Belarus will be substantially reduced this year, Semashko said. 

Moscow and Minsk have agreed that Belarus "will pay back a certain accumulated sum, which the Russian side considers as gas supplies indebtedness."

"We have to pay it back. Instead, we’ve got one-time gas price cut already this year and some other aid from the Russian side," Semashko said. 

The price of Russian natural gas for Belarus will be formally lowered from July 1, 2016 while Minsk is required to repay the gas debt to Russia before October 25, Vladimir Semashko noted.

"The price reduction mechanism is not so direct. There are more complex mechanisms of how really to ensure the trajectory and how Belarus will get a certain benefit from that," the vice-premier said.

Semashko did not specify the gas price, referring to the relevant agreement with the Russian side. He also did not mention the specific figure to return a certain sum for the volumes of Russian natural gas supplied to Belarus.

At the same time, the Belarusian vice-premier said Belarus was required to return these funds before October 25. "But I’ll be asking my Russian counterparts to make this somehow by installment. Perhaps, by the end of this year," he said.

The Belarusian vice-premier added that Belarus was not considering these funds as debt.

"Honestly speaking, pursuant to the accords that are in effect, we could have a possibility to retain over $50 from each 1,000 cubic meters. But we retained $25 and this is our compromise towards the Russian Federation because Russia made certain other concessions and is closing this theme differently for us. Moreover, we say that we’ll return this accumulated sum. I do not even call it a debt," the Belarusian vice-premier said.

Belarus has been holding talks with Russia since the beginning of the year on the gas price reduction. At the same time, Russia has cut its oil supplies to Belarus by more than a third since July in response to what Moscow believes is Minsk’s failure to pay for the supplied natural gas in full.

Minsk insisted on lowering the price of Russian natural gas from $132 to $73 per 1,000 cubic meters and demanded that Russia switch to equal netback pricing. Belarus also did not recognize the existence of the debt for the gas supplies since early 2016.

Belarusian President Alexander Lukashenko instructed Vice-Premier Vladimir Semashko in September to finally agree with the Russian side on the supplies of energy products.

Russia’s Energy Minister Alexander Novak said in early October that Belarus’s debt for Russian natural gas equaled $270-300 million.

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