Russia cuts Belarus gas again as energy feud escalates

23rd June 2010, Comments 0 comments

Russia on Wednesday cut gas supplies to Belarus by 60 percent as a payment feud between the ex-Soviet neighbours that has raised fears for European consumers went into a third day.

But despite threats from maverick Belarussian leader Alexander Lukashenko that he was shutting down transit of Russian gas to Europe, Russian state gas giant Gazprom said gas was flowing normally.

In a dramatic appearance on television for the third day in row, Gazprom chief executive Alexei Miller said the company was making good on its threat to continue cutting supplies but vowed that European customers had nothing to worry about.

"We have two pieces of news. One is good, the other is bad," a grim-faced Miller said.

"Transit of Russian gas through the territory of Belarus is being implemented in the full amount and consumers of Russian gas do not experience any problems with it."

"The bad news is the Belarussian side is undertaking no action to settle the debt for Russian gas supplies," he said, noting his company had moved to limit supplies by 60 percent from Wednesday morning and the cuts would continue in proportion to Belarus's outstanding debt.

Gazprom reduced gas supplies to Belarus by 15 percent Monday and then 30 percent Tuesday as it followed through on promises to cut the flow of gas if Minsk did not pay a debt of nearly 200 million dollars.

Moscow accuses Minsk of failing to settle a debt of 192 million dollars (156 million euros) to Gazprom, but Belarus says the firm also owes it more than 200 million dollars in transit fees.

The gas giant has said it would incrementally reduce gas supplies up to 85 percent of the normal volume if the debt is not settled in the coming days.

Following Tuesday's cut, Lukashenko ordered a shutdown of Russian gas transit deliveries to Europe, raising fears in the European Union, whose members Lithuania, Germany and Poland depend on Russian gas piped through Belarus.

Gazprom pledged the dispute with Belarus would not hit supplies to European clients and the EU has called on Minsk and Moscow to respect their contractual obligations.

Analysts say the dispute has been sharpened by Lukashenko turning away from traditional reliance on the Kremlin and pursuing closer ties with the European Union.

In an escalating war of words, Lukashenko said Tuesday he would not be humiliated with references to "cutlets and sausages" by Moscow after his Russian counterpart Dmitry Medvedev said acerbically that Russia could accept "neither pies nor butter nor cheese nor pancakes" when cash-strapped Belarus offered to foot the gas bill with machinery and other equipment.

In recent months Russia and 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.

Minsk angered Moscow in May when it pulled out at the last minute from a key summit aimed at creating a joint customs bloc between Russia, Belarus and Kazakhstan, forcing Russia and Kazakhstan to launch the bloc alone.

Lukashenko displeased the Kremlin further when he gave sanctuary to former president Kurmanbek Bakiyev of Kyrgyzstan, who was deposed in a popular uprising in April.

"What does this mass fascination with food metaphors mean?" Russia's leading business daily Vedomosti quipped in an editorial on Wednesday.

"Gas supplies, debts, disputes over the customs union or Bakiyev -- all of that is secondary. The fact of the matter is that the leaders of Russia and Belarus simply do not like each other."

© 2010 AFP

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