Rebuilding An Empire

Belarus Will Pay More for Gas Next Year

Belarus will pay over $200 per 1000 cu. m. of natural gas in 2009, Vasily Khrol, Deputy State Secretary of the Union of Russia and Belarus announced yesterday. Gazprom has confirmed that information. The Russian monopoly demanded that much in 2006, but Belarusian President Alexander Lukashenko managed to hold the price down to $100 by selling Gazprom half of Beltransgaz for $2.5 billion. State Secretary of the Union State Pavel Borodin said that Belarus may avoid the high price this time by forming a confederation with Russia. The Russian Federation Council thinks Belarus could receive a price break in exchange for the placement of nuclear arms on its territory.

Belarus pays 67 percent of the price Poland pays for natural gas (minus transit fees and export duties) this year under the formula worked out by Gazprom and Beltransgaz in January of last year. In 2009, Minsk is to pay 80 percent of Warsaw's price. Gazprom sources say that, in spite of continual efforts by the Belarusians to negotiate a price freeze, that country will pay more for its gas next year. Poland is paying $310-320 per 1000 cu. m. of gas this year.

A political solution may found to suit both sides. Borodin noted that a confederation, for which he held up the European Union as an example, would allow common border and customs procedures and pricing policy. Belarus is experiencing increasing economic pressure from the West, and Lukashenko has made it clear that he is willing to be cooperative in economic issues in exchange for political support. During a visit to Minsk last week, Russian Prime Minister Viktor Zubkov expressed Gazprom's desire to be freed from a fee imposed by the Belarusian Ministry of Fuel and Energy's innovative fund.

Nothing that appropriating the remaining 50% of Beltransgaz won't solve.

Russian senators note that a confederation of the two states would allow the placement of Russian nuclear arms in Belarus in response to U.S. plans to install missile defense facilities in Poland. Minsk has not commented on that possibility. In the middle of the 1990s, Belarus declared itself a nuclear-free zone.

That should cause Vladimir Paranoid to rethink his plans.

Or help Lukashenko to better understand Putie's Good Neighbor Policy

Via Kommersant