Russia “not ready” to scrap export duty on crude oil

Belarus continues to underpay Russia for natural gas deliveries, Ambassador Aleksandr Surikov siad. In 2009, there was an oral agreement between the two presidents

Russia is “not ready” to remove its customs duties on crude oil and petroleum products sold to Belarus, Ambassador Aleksandr Surikov said at a news conference held in Minsk on June 11, as quoted by BelaPAN.

At the same time, the Russian ambassador acknowledged that “customs duties in a customs union are an atavism.”

In late May, Russia and Kazakhstan agreed to launch their Customs Union on July 1 on a bilateral basis without Belarus after negotiations stalled as Moscow refused to abolish its export duty on crude oil that it sells to Minsk.

Earlier this month, Mr. Lukashenka said that Belarus was ready to compromise on Customs Union agreements.

When commenting on Mr. Lukashenka’s coming Friday talks with Russian leader Dmitry Medvedev in Moscow, Mr. Surikov said that “one should expect what the Belarusian and Russian sides want from them.”

The two countries should look for solutions and “mutually beneficial and equal conditions for business operations in the sphere,” he said. “Subsidizing one state at the expense of another is a wrong thing. The giver feels uncomfortable and so does the receiver because receiving is humiliating.”

As for Russia’s duty on crude oil sold to Belarus, Mr. Surikov reiterated that Russia had agreed to supply 6.3 million tons of crude to the neighboring country duty-free for domestic consumption. The deal, struck this past January, allows revising the quota upward in September, he said.

“We don’t have any desire to increase crude deliveries to Belarus without good reason,” the ambassador said.
Moscow has repeatedly said that it will scrap the duty only after the establishment of a single economic space, the next step to be made by Belarus, Kazakhstan and Russia toward their closer integration.

Belarus continues to underpay Russia for natural gas deliveries, Surikov told reporters. In 2009, there was an oral agreement between the two presidents that Belarus would pay for the imports at an average price projected for the entire year, Mr. Surikov said.

“Oil and gas prices dropped at a result of the year and the debt was settled,” he noted. “This year the situation is, however, different. Oil and gas prices are increasing, while the Belarusian side continues to pay in accordance with last year’s oral agreement that has not been extended for this year. This is in violation of the contract."

Mr. Surikov said that Belarus currently owed Russia around $192 million for natural gas deliveries.

Gazprom says that Belarus continues to pay $150 for 1000 cubic meters, lower than the contract price that was raised by the Russian monopoly from $121.98 in the fourth quarter of 2009 to $169.22 in the first three months of this year. It has warned that the debt could swell to $600 million by the end of the year, projecting the price to average out at $187 this year.

Belarus underpaid last year as well. The contract price was $210.32 in the first quarter of 2009, but it was projected to average out at $150 during the entire year. Citing the projections, the Belarusian government refused to pay the higher price and ran into a debt of $244 million in the summer of 2009. The contract price fell to $121.98 in the fourth quarter, and the debt automatically dwindled.