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Russia And Belarus To Make Payments For Gas In Rubles

Russia And Belarus To Make Payments For Gas In Rubles

The new gas payment scheme is introduced for Belarus.

Russian and Belarusian effecters have reached an agreement on the controversial issue of gas supplies to Belarus, which has been on the agenda since the beginning of the year, Kommersant reports.

According to the newspaper, instead of the dollar pricing formula there will be applied the entirely ruble one, based on average gas prices in Russia with the step-up ratio. As the result, gas will become cheaper for Minsk in 2017 by about 30%, up to 6 thousand rubles per thousand cubic meters. Then the cost of gas in Russia and Belarus will continue to close in and become same in 2025, when the countries’ integrated electricity market starts working.

Now the dollar pricing formula entails the price of gas on the Yamal Peninsula, the cost of transportation to Belarus, storage and local market distribution.

Starting with 2017, the price of gas for Belarus will be determined by the average price for the Unified Gas Supply System (UGSS) of Russia, multiplied by the inflation index. The average price for 2017 amounts to about 4.05 thousand rubles per thousand cubic meters, and the multiplying factor is approximately 1.48. Thus, the price for Belarus will be about 6 thousand rubles in 2017. For the remaining months of 2016 there has been set a fixed price of 6.3 thousand rubles.

The effecters have also agreed that the inflation index will gradually decline, and in 2025 (when, according to the agreements, the EAEC countries create a single gas market) will be equal to one.

The agreement stipulates changes in the intergovernmental arrangement of 2011, taking out the thesis of Russia's transition to the equal income gas prices from it. It is this paragraph that allowed Minsk to challenge the current gas prices. Thus Minsk hasn’t settled in full for the gas since January.

If new terms are approved, Belarus will repay the debt to Gazprom at the old price, including penalties, and Russia will fully resume the oil supply to the country, which has been frozen in the course of the conflict. It remains to be seen, at what point the agreement will come into force, the newspaper notes. Belarus proposes the date of July 1, the Russian side – August 1. The amount of debt for gas for the six month period is currently about $ 300 million.

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