Price for Russian gas will only grow

The official Minsk said it had allegedly disputed the proposed by Gazprom method of pricing, based on a principle of equal incomes.

Pyotr Nikitenka, director of the Institute of Economy at the National Academy of Belarus, has recently said it. As a result, according to him, Belarus is to pay for gas USD 129 per 1.000 cu m after the first quarter of the year. Economist Yaraslau Ramanchuk, director of Mises Center, said in the interview to the Charter’97 press center that the figure 129 was clearly theoretic. He said “no principal agreements on gas price have been reached, and the price will be determining in late March.”

“No principal agreements on gas price for Belarus have been reached. This price will be determined only in the end of the first quarter of ht year and will obviously grow. And the fact that in the beginning of the year we don’t know how much we will pay in August or December is the evidence that there is no partnership relations between Russia and Belarus,” Yaraslau Ramanchuk says.

“It’s clear that Belarus wants to buy cheap gas, but Gazprom stands unalterably against sponsoring the Belarusian economy. Gazprom has offered Belarus a rather favourable variant of transition to market relations. The recent Nikitenka’s statements confirm the fact that an issue of transition to market relations with the Russian monopolist is unpleasant for the Belarusian authorities. The fact that the gas price for Belarus is rather low this year is the cost for entering of Russian financial structures to Belarusian market,” the economist states.

In his view, a question on formula of gas price formatting, raised recently, has vested interests. The Belarusian authorities will have another opportunity to blame Russia of pressing Belarus, and as a result of it, of inevitable economic problems.

“Though an issue of price for Russian gas is an absolutely political one, we will have to pay market price, and we can’t avoid it, if we don’t speak about loss of independence of our country,” Yaraslau Ramanchuk thinks.

It should be reminded that according to a five-year contract, signed on 31 January 2006, the gas price for Belarus is calculated on a formula, depending on cost of oil on the European market. It is to amount to 67 per cent of the average European price minus transport expenses in 2008, 80 per cent in 2009, and 90 per cent in 2010. The new formula of price meant a transition to a new method of pricing based on the principle of equal incomes of the Russian company from sales both on the European and the Belarusian markets.

Judging from price of USD 260 per 1.000 cu m – gas price for Poland in the end of 2007, and the established for Belarus discount for 2008, and after deduction of transport expenses, the gas price for Belarus is to amount to USD 160 per 1.00 cu m.