Lukashenko lashes out at Russia over energy prices :: Charter'97 :: News

Belarusian President Alexander Lukashenko lashed out angrily at the Russian leadership over energy price increases, calling its conduct "shameless," and his government said it was slapping a customs duty on Russian oil pumped across its territory to Europe. The oil transit fee and the fiery remarks were the latest salvos in a politically charged struggle over Russia`s moves to end years of preferential treatment that have helped the authoritarian Lukashenko keep his country`s Soviet-style economy running and maintain his grip on power.

They came after Belarus averted a New Year`s Day cutoff of Russian natural-gas supplies by grudgingly agreeing to pay twice the previous price this year and even more in the future, and appeared aimed at prompting Russia to scrap a new customs duty this year on oil exports to its neighbor.

Belarus has stopped importing Russian oil as it seeks to persuade Moscow to reconsider the duty of US$180 per metric ton, saying the additional charge makes oil purchases too expensive and could badly damage the economy.

"If they are drowning in petrodollars and other currency income and have decided ... to place us in conditions worse even than Germany and other European countries, then let`s ask this rich Russia to pay us for our services," said an agitated, pale-looking Lukashenko, shouting at times in televised remarks during a government meeting on Wednesday.

Later, Prime Minister Sergei Sidorsky told a news conference Belarus has imposed a customs duty of US$45 (€34) per metric ton on Russian oil crossing Belarus, also effective Jan. 1. According to government figures, nearly 79 million metric tons of Russian oil transited the nation`s pipelines last year; it goes into EU nations including the Baltics as well as Ukraine.

Lukashenko said he had ordered the government "to send Russia a proposal on payment for everything they get here for free — from military facilities and transit."

The trade disputes reflect severe strains in ties between the two former Soviet republics, which go back centuries and remained very close after the 1991 Soviet collapse but have been frayed in recent years by a power struggle between Lukashenko and Russian President Vladimir Putin`s Kremlin.

Belarus is a key Russian military ally and buffer against NATO, and the nations agreed a decade ago to form a close union. But the recent energy pressure suggests the Kremlin is growing tired of supporting Lukashenko, who has resisted efforts to grant Moscow more control over his country and its economy.

Lukashenko, who gave in to long-standing Russian pressure to sell a half share in his country`s gas pipeline system as part of the gas price agreement signed in the final minutes of 2006, said that he had fulfilled Russia`s demands and now wants Russia to fulfill his.

He said he had issued Sidorsky "a direct order to sign an unfavorable agreement on gas" because, he claimed, Russian Prime Minister Mikhail Fradkov had promised that reaching a gas deal would bring a resolution to disputes on the oil customs duty and what Belarus says is blockage of its sugar exports.

The customs duty would deprive the Belarusian government of major profits it has reaped by exporting oil products made from cheap Russian oil.

The outspoken Lukashenko said it would bring the oil price to levels that would put "millions of people in Belarus" out of work — an apparent reference to refineries that are now operating on reserves and other industrial enterprises that could be affected in the nation of 10 million.

He said Belarus is ready to evenly share revenues from the oil products it sells.

Belarusian officials have said they are hoping for a favorable resolution to the oil dispute by mid-January. Russian officials have said little about the issue and could not be reached for comment late Wednesday, during a holiday that ends next week.

Russian authorities have virtually halted imports of Belarusian sugar as of Jan. 1, Ivan Danchenko, head of the state-run agricultural production concern Belgospishcheprom, said Wednesday, adding that Belarusian sugar producers have lost some US$2 million (€1.5 million).

Sugar made from Belarusian sugar beets is not subject to Russian customs duties. Belarusian producers began experiencing problems with exports late last year, amid Russian suspicions that they were sending Latin American-produced cane sugar to Russia in the guise of beet sugar to avoid customs duties.