Gas row continues unabated, Lukashenko threatens Russia with cut-off
Published: 25 June, 2010, 14:49
Edited: 06 July, 2010, 00:41
TAGS: Conflict, Russia, Belarus, Lukashenko, Gas
Belarusian President Aleksandr Lukashenko has called for a cut-off of Russian transit gas via the country’s territory despite payments made on Thursday, and is now threatening to cut off oil transit as well.
“I am warning the government once again: failure by Gazprom to pay for the services over the next 24 hours must lead to the suspension of any services for the Russian Federation, involving the transportation of hydrocarbons – oil and gas,” Lukashenko said at a government meeting on Friday.
“You have two days to agree to this. I said this yesterday to the prime minister and the deputy prime minister,” the president said.
The Russian side does not admit to the debt.
“Under the clauses of the contract, Gazprom owes nothing to Belarus,” commented Gazprom spokesperson Sergey Kupriyanov.
Earlier, Russia reduced its gas supply to Belarus to 40% because of the neighbor’s debt of $192 million. The supplies were fully restored on Thursday after the Belarusian side fully cleared the debt, paying at the price stipulated in the contract.
In its turn, Russian company Gazprom paid off its transit fees owed to Belarus. However, disagreement still continues as Gazprom has paid $228 million, whereas Belarus claims the transit fee debt is $260 million. Gazprom says that Belarusian estimates are calculated according to a higher transit fee, but Belarus itself hasn’t fulfilled the commitments that are required by the contract for this rise.
Political analyst Dmitry Babich says the conflict will gradually be resolved. As for the row, Babich says “Lukashenko did not like the pressure that was applied to him.”
“So he is building a sort of resistance, he wants to show Moscow that he can deal with it the same way it deals with him,” the analyst believes.
Watch the full interview with Dmitry Babich
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25.06.2010, 13:37
5 comments
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This was all about prices and enforcing them. What was happening was that there were debts both ways, and Belarus wanted to decide how they were offset, basically setting its own Gas and transit fees. It decided on the Net debt after its calculation. This also had the additional benefits of cashflow reduction and possible foreign exchange aquisition. In this situation Gazprom had to force actual transactions, representing actual contractual amounts . Exact payment from Belarus against contracted Gas, exact payment to Belarus against contracted transit. These had to be fully reconciled transactions to make it work. The net effect is that Belarus is not happy, because it cannot set the parameters of the deal as it wanted to. Effectively it couldn't vary the contract as it wished. Now the game moves onto Belarus trying to get those variations in the contract by other means, in this case blackmail.












Ok now we are onto the backdating clause. Basically at what point will the new negotiated price take effect for transit. This is great stuff, it really wraps up all the issues of what you get into, when you have money flows and set off and where people think some negotiations have moved to being contractual obligations, while others not. Don't you think with all the Lawyers these guys have, they could have avoided this. Hope the new paperwork is better!