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Sunday, October 23, 2016

The gas conflict between Minsk and Moscow could degenerate into the oil

Belarus decided in half to raise tariffs for the transit of Russian oil via the inherited from the Soviet era oil pipeline “Friendship”. Obviously, this is another attempt to bargain for a lower gas price from Gazprom, the dispute which has lasted for ten months. Thus, Belarus begins to behave almost like Ukraine.

The Belarusian authorities decided 1.5 times to raise tariffs for transportation of Russian oil. Innovation concerns of crude oil transported from Russia via the pipeline network, owned by the Belarusian enterprise “Gomeltransneft Friendship” and “Polotsktransneft Friendship”. They are responsible for three areas built in Soviet years of the oil pipeline “Friendship”.

“Actually Belarusians to complain about – Russian gas they get at the lowest price in Europe”

This is stated in the decree of the Ministry of Antimonopoly regulation and trade No. 30, published on Saturday, October 1. The new tariffs will enter into force 10 days after official promulgation of the decision, i.e. on 11 October. In February this year, the tariffs have already been raised.

Now transportation of oil by pipeline Unecha (Vysokoye) – Adamova Zastava will be 400,98 Russian rubles per ton without VAT. Earlier the tariff was 267,32 of the ruble.

Transportation of ton of oil on the route Unecha (Vysokoye) – Brody rose to 172,23 of the Russian ruble against 114,82. Rate in the direction of Nevel (Velikie Luki) – Polotsk will increase from up to 48.47 32,31 ruble.

This decision, Belarus may be trying to put pressure on Russia to resolve the dispute over natural gas supplies from Russia, which lasts from the beginning of this year. Minsk believes that overpays for Russian gas, Gazprom should give him a discount. So, the Prime Minister of Belarus Andrei Kobyakov said that a thousand cubic meters of energy should cost 80 dollars, not 132 dollars (the current price for Belarus). The Belarusian Minister of energy called the “fair” price for Russian gas at $ 73 per thousand cubic meters.

Gazprom believes that Belarus should pay for the fuel under the contract is 132 dollars. According to the contract, it is formed so: the price of gas in the Yamalo-Nenets Autonomous Okrug 36 dollars plus 90 dollars for the transportation of gas to Belarus plus six dollars for the storage of gas in the Russian UGS (underground gas storage).

In the end, with the beginning of the year Belarus pays Russia for gas at the price that feels fair. Meanwhile, Gazprom invoiced under the contract, and the price difference is converted into the debt of Belarus to Russia for gas. Only for the first half of this debt amounted to more than $ 270 million. Now debt already exceeds $ 300 million.

In August, “Kommersant” reported that the parties almost managed to agree, Russia agreed to sell Belarus gas at $ 100 per thousand cubic meters. Furthermore, Minsk also insisted on reducing the cost of transporting gas and not of the price of storage in the Russian UGS. Later, however, the Kremlin has denied that Russia agreed to a change in the price formula.

Later, on 11 September, the President of Belarus Alexander Lukashenko said that Russia and Belarus are once again reportedly close to agreement on the price of gas. “Almost agreed, created a document,” he said, adding that the Russian side will probably offer some options. The document was in the government of Russia.

However, this again failed to reach a compromise. After just 9 days later, Lukashenka made an angry appeal. “We are fiddling with (or not say) and for several months can not agree on the price of gas. In this regard, Russia has reduced oil supplies. We perceive this as pressure, but pressure I will not tolerate, and also the Belarusians,” – said Lukashenka.

Russia is really trying to “persuade” Minsk not to sabotage gas contract terms through the reduction of Russian oil deliveries to Belarus in response to the underpayment of Belarusian companies for gas. We will remind that in Moscow at discounted prices supplies crude oil to Belarusian refineries, which then make the export of petroleum products. However, under the agreement, Belarus will return part of the oil products to Russia in exchange for deliveries of crude oil. And Moscow has repeatedly accused Minsk of violating these agreements.

Meanwhile, the Belarusian President also threatened Moscow, the breakdown of cooperation within the EEU. Lukashenko said that he instructed the government to streamline the country’s participation in integration processes on post-Soviet space. “We are now very carefully assessing our participation especially in the Eurasian economic Union. If so will proceed – why are we there to keep a bunch of bureaucrats? Why pay money for the Moscow high-class specialists? Broken all agreed” – outraged the Belarusian leader.

Belarus has repeatedly made such strong statements in an attempt to negotiate a discount on gas. Recently, for example, Minsk said about the readiness to buy gas in Russia, and in Kazakhstan and Uzbekistan, because that’s where he supposedly cheaper. All this is not that other, as an element of bargaining with Gazprom.

Actually Belarusians to complain about – Russian gas they get at the lowest price in Europe. But even if the price was higher find another vendor Belarus would be difficult.

132 dollars is the price, which has developed a long-term contract, which was signed on the basis of an intergovernmental agreement between Belarus and Russia. Other pricing mechanisms in Belarus no.

In the framework of an intergovernmental agreement, Belarus has sold its gas infrastructure to Gazprom, the cost was $ 5 billion. It spells out including the right of Gazprom as an investor in the Belarusian gas sector, how through the implementation of gas in the Belarusian market all these investments should pay off in the long term.

Most interesting is that in previous years the Minsk quite satisfied with the price formula in the contract, the dispute arose only this year – and not by accident. The reason is the change in market conditions (the rise of the dollar), which led to the fact that the discount for Belarus contract was not as significant as they were before. “In 2013-2014, Belarus received a discount on this contract in the region of 50% to the price of gas in neighboring States, and now it is 20-30%,” – said the newspaper VIEW Deputy Director of the national energy security Fund Alexei Grivach.

So, in 2013, the difference between the price of Russian gas for Belarus for Europeans was more striking. Then in Europe, Russian gas cost $ 350 per thousand cubic meters, and Belarus – 160 dollars, the benefit of Minsk was $ 190. Now Europe buys Russian gas at an average of 170-180 dollars per thousand cubic meters, while Minsk – $ 130. The difference was reduced almost five times.

Meanwhile, Minsk is still a sin to complain about the price of Russian gas is still cheaper than Europe. This is the lowest price in the CIS and in Europe and even in other countries of the Eurasian Union. In Europe, the average gas price is 170-180 dollars per thousand cubic meters, in the CIS – 140-150 dollars.

The Belarusian “daughter” of Gazprom – “Gazprom transgaz Belarus” – in may, has filed a lawsuit in the arbitration court at the Belarusian chamber of Commerce and industry to the gas supplying organizations in the country about the debt for the gas supplied. Gazprom could easily win this lawsuit. Another thing is that the trial may last so long that the expiration of the contract, said recently the Russian Ambassador to Belarus Alexander Surikov.


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