Belarus revives Russia energy feud with transit cut threat

25th June 2010, Comments 0 comments

Belarussian President Alexander Lukashenko on Friday revived an energy feud with Moscow, warning he would halt Russia's Europe-bound oil and gas transit within two days if Moscow did not pay a debt.

Lukashenko also raised the stakes in the convoluted energy spat by explicitly warning for the first time that Belarus would cut off oil supplies as well as gas deliveries to Europe.

"I once again warn the government: Gazprom's failure to fully pay for services in the next days must lead to a halt of any services on the shipment of hydrocarbons -- both oil and gas -- for Russia," Lukashenko was quoted as saying by his office.

"You have the opportunity -- come to an agreement. But you have two days."

On Thursday, Russian gas giant Gazprom paid Belarus 228 million dollars in gas transit fees, but Belarus insists the Russian gas firm owes it a total of 260 million dollars.

Gazprom quickly issued a terse statement after Lukashenko's threat, denying it owed Belarus further payment.

"Gazprom does not owe anything to Belarus according to the conditions of the current contract," it said.

But it added there was an agreement in principle on an "addendum to the contract for 2010" and the two companies planned to sign it "in the near future", signalling it may pay a higher transit fee.

Lukashenko's statement came after the two ex-Soviet neighbors took major steps Thursday to put to rest a four-day energy feud that sparked a brief interruption of gas supplies via Belarus to Europe.

The dispute flared Monday when Russia reduced gas supplies to Belarus over a debt of nearly 200 million dollars. After an initial cut of 15 percent, Gazprom ramped up reductions to 60 percent on Wednesday.

Following the cut, Lukashenko on Tuesday ordered a shutdown of Russian gas transit deliveries to Europe in retaliation, raising fears in the European Union, where member states Lithuania, Germany and Poland take Russian gas delivered through Belarus.

Lithuania on Wednesday reported a 40 percent drop in Russian gas supplies via Belarus.

EU Energy Commissioner Guenther Oettinger described the cut to Lithuania's supplies as an "attack" on the whole European Union.

Russia resumed full supplies to Belarus on Thursday when it confirmed Minsk had covered its arrears and for its part sent Belarus 228 million dollars in gas transit fees.

In recent months Russia and once-dependable ally Belarus have often been at loggerheads over energy prices and customs duties, but the latest dispute is the fiercest feud yet between the two ex-Soviet neighbors.

Oil supplies are also a major bone of contention between the two countries. In January Moscow and Minsk signed a new deal on Russian oil deliveries to Belarus, ending a month-long dispute that had raised fears European supplies could be threatened.

A disagreement over oil export duties last month also held up the creation of a single customs bloc that Russia, Belarus and Kazakhstan had wanted to launch from July 1.

Lukashenko, speaking at a meeting aimed at developing his country's cooperation with China, told officials Minsk should also seek closer ties with Venezuela, Africa, the Middle East and the Caribbean.

"This is the issue of the survival of our state as sovereign and independent," he said in televised remarks.

"If we don't solve it we will be turning somersaults and they will kick us in the back the way they have kicked us before. They will throw a noose around our necks and tighten it until we start wheezing," Lukashenko said in a thinly veiled reference to Russia.

Russian Prime Minister Vladimir Putin said this week Minsk had nothing to complain about as it pays the lowest price of anyone for Russian natural gas.

© 2010 AFP

0 Comments To This Article