Izvestia: Russia declares an energy war to Belarus

In the Ministry of Energy of Russia they claim that Minsk refuses to fulfill the agreements on petrol supplies.

Belarus doesn’t return the petrol, made from Russian oil as they sell the fuel to the West disguised as solvents, Izvestia reports.

Russia intends to partly compensate the $1 billion budget loss caused by Belarus’ duty-free export of Russian oil products to the West as solvents. According to the information the media has, Russia insists on Belarus to fulfill the agreed plan providing for supplies of 2,1 million tons of petrol and 3,5 million tons of diesel, made from Russian oil at Belarusian refineries, to the Russian market till the end of 2012.

Such supplies threaten dozens millions loss to Belarus. The state-owned Belneftekhim buys Russian oil at a price higher than the one for the domestic Russian market, whereas it will have to sell the oil products at low Russian prices.

- For the past 9 month Russia completely fulfilled its obligations as for the oil supplies and multiple times over fulfilled the obligations as to supplies of basic kinds of oil products. In its turn, the Belarusian side barely fulfilled 2% of the planned amounts, which doesn’t suit the Russian side on principle, - they officially told Izvestia in the Ministry of Energy of Russian Federation.

At the current price level for oil the total amount of the export duties, which Belarus would have to pay in 2012 on this amount of the oil products, is estimates as more than $1 billion. In the summer the situation caused worries within the Russian government, in July they blocked the railway procurements of Russian naphtha - straight-run gasoline, which was used for production of “solvents” – to Belarus. At the same time the vice prime-minister of Russia Arkadziy Dvarkovich commissioned the respective structures with a task to analyze the situation.

The Finance Ministry, Federal Customs Service and the Ministry of Foreign Affairs were told to develop measures, which would eliminate the export of oil products disguised as solvents. The suggestions should have been considered at the session of the Economic Commission of the Customs Union on 14 September.

The economic bloc of the government prepared three variants of a solution to the problem, every one of which implied making amendments to the 2010 agreement on the procedure of payment of duties on oil on oil products transferred from Belarus outside the Customs Union. It is offered either forbid Belarus to use Russian oil products for further processing with the aim of subsequent export, or charge an export tax on the Russian oil products supplied to Belarus for further processing and export. The third variant implied making the payment of duties on Russian oil products independent from the customs procedures which are used for the goods exported from Belarus.

According to the market sources, at the Economic Commission of the Customs Union´s session on 14 and 25 September Russian suggestions were blocked by the Belarusian side.

In September, also at the order of Arkadziy Dvarkovich, the Ministry of Energy and of the Russian Federation Ministry of Economy of the Republic of Belarus started the consultations on the fulfillment of the indicative balance for 2012 and drawing up a balance for 2013. In the course of the negotiations Russia demanded from Belarus to fulfill the obligations stated in the balance and to supply Russia with 2,1 million tons of petrol, 3,5 million tons of diesel and 0,2 million tons of aviation kerosene before the end of 2012.

The representative of Belneftekhim on their part explained that such supplies are unprofitable as Belneftekhim buys Russian oil at a price higher than the one for Russian refineries. It was also brought up that part of Russian oil is being processed on processing conditions and it was suggested to ensure the fulfillment of the supplies obligations at the cost of Russian companies. Russia wouldn’t agree with such explanations and decreased the oil supplies to Belarus from 5,3 to 4 million tons in the VI quarter.