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25 Jul, 2007 03:35

Belarus dragging feet on Russian gas bill

After a standoff at the start of this year, Gazprom increased the price it charges Belarus for gas from $US 55 to $US 100. Under the agreement, the price increase took effect in June. But Minsk hasn’t paid for any of the gas it’s received this year.

Analysts, however, have no doubt that Belarus has the money to pay.

“Belarus can pay back its debt of $US 450 MLN. It recently received $US 625 MLN from Gazprom for a 12% stake in the Belarus pipeline operator Beltransgaz. I think now Belarus is trying to postpone the payment until autumn or even the end of the year,” believes Dmitry Lyutyagin, gas analyst from Solid Investment Bank.

Belarus contracted for 22 BLN cubic meters of Russian gas this year – paying the new price of $US 100 for half of this volume. Market watchers believe Minsk will now make further concessions to lower its debt.

“I think there could be all kinds of political agreements. For example, Minsk could reduce transit tariffs for Russian oil across its territory,” Mr Lyutyagin suggests.

The Belarusian Prime Minister, Sergey Sidorsky, is due to visit Moscow next Monday. The two parties are expected to consider a $US 1.5 BLN loan for Belarus to pay for future Russian gas deliveries, as well as the restructuring of its current debt.