Gazprom says it plans to raise Belarus rates :: Charter'97 :: News

Russia`s state-controlled gas monopoly has announced that it will require Belarus, a Kremlin ally whose economy is subsidized by Russia, to begin paying market prices for natural gas. The announcement Thursday, in a period of political turmoil in Belarus after tainted presidential elections March 19, was seen by political analysts as a move by the monopoly, Gazprom, to gain control of Belarus`s gas transit system, which carries a large share of Russia`s gas supply to Europe.

It reflected the broader trend of Gazprom`s consolidation of Russia`s gas markets and its efforts to drive up revenue. But the price demands could also sharply drive up the cost of the fuel for an ally, causing new pressures on President Alexander Lukashenko.

Gazprom, which has been criticized as a political tool of the Kremlin, has been raising rates for former Soviet states it long subsidized, including Georgia, Moldova and Ukraine, where the step was seen in part at least as revenge for turning away from Russia politically. Until Thursday, Belarus had not faced such pressure, and has been allowed to buy Russian gas at $47 per thousand cubic meters, a sharp contrast to European prices in excess of $230.

Gazprom, in a statement, said European prices would be effective for Belarus in 2007 and that Belarus should submit proposals for the adjustment by April 30.

Sergei Kupriyanov, a Gazprom spokesman, suggested in televised remarks that the company is acting prudently by seeking the terms of the adjustment now, long before the contract expires in December.

A similar contract with Ukraine, which expired late last year, ended in a midwinter standoff with the Ukrainian government.

Eventually Gazprom briefly cut off the flow for Ukraine, thus also reducing supply to Europe that came through Ukraine during a cold spell and drawing sharp criticism from Western governments.

"So that the issue of the gas prices for Belarus would not become the topic of the New Year`s eve TV programs, we proposed now, in advance, to agree on how we will work in the next year," Kupriyanov said in an appearance on the ORT television station. "The position of Gazprom is that the supplies of Russian gas should be carried out at prices corresponding to the European level."

The price demand underscored the shifting circumstances faced by Lukashenko, whose recent re-election was denounced as a fraud by the West.

Since the end of the election campaign, he has faced the most energetic protests in his 12 years of authoritarian rule. The Belarussian authorities have been engaged in a broad crackdown, arresting hundreds of peaceful protesters and one former candidate, who remains in jail.

The new open opposition has suggested that Lukashenko`s hold on power is weakening. There has also been widespread curiosity about the whereabouts and condition of the president, who is typically robust and omnipresent on state-controlled news but has appeared only once since March 20.