Belarus president rails at Moscow`s «unfriendly steps» :: Charter'97 :: News

Russia`s relationship with Belarus showed further signs of strain yesterday after Alexander Lukashenko, Belarus`s authoritarian president, accused Moscow of "unfriendly steps" and threatened to charge fees for transit of Russian oil across his country.

Speaking for the first time since Belarus succumbed to Russia`s demands to double gas prices and take control of half of its pipeline infrastructure, Mr Lukashenko said he had instructed his government to propose to Moscow that it pay for everything "they are getting here for free, from military objects to transit of oil".

Analysts said Mr Lukashenko`s angry comments should be put down to the frustration of a leader push-ed into a corner.

"Lukashenko is in an extremely weak position - both economically and politically. He is already isolated by Europe and Russia is his only lifeline," said Christopher Weafer, chief strategist at Alfa Bank.

On New Year`s eve, Gazprom, Russia`s state-controlled gas group, forced Belarus to sign a new five-year gas deal which will bring gas prices to European levels by 2011. Russia also threatened to slap a full duty on Russian - currently duty-free - crude oil exports to Belarus of $180.70 (£92.71) per tonne from next year.

These measures would wipe out most of the $4bn plus subsidy that Mr Lukashenko has enjoyed over the past years and which helped him retain his popularity. However, unlike Ukraine, the former Soviet republic that irritated Russia by pushing closer to Europe, Belarus has few friends in the west and now risks straining its relationship with Russia to a breaking point.

Mr Lukashenko, branded the last dictator in Europe, yesterday told his ministers: "If those in Russia, choking on this influx of petrodollars and other sources of hard currency, are still willing to make a scapegoat of Belarus . . . then let`s ask the Russian Federation - so huge and so rich - to pay usin full for our services."

Mr Weafer said Belarus`s transit fees would not have a material impact on the Russian economy. However, Russia`s decision to slap export duties on its crude would deprive the Belarus budget of $1.7bn. Belarus imports duty free crude from Russia, refines it and sells the petroleum products to western Europe at market prices, pocketing the profit.

Mr Lukashenko said Russia had made "a number of unfriendly steps in our trade relationships".

He said Moscow had promised to resolve the issue of oil export duties as soon as Belarus signed the gas deal but that the question remained unresolved.