Gazprom threatens to cut off gas for Belarus

Moscow and Minsk can fall out over gas again. Belarus does not pay the contract price, but 50$ per 1000 cubic metres.

On Monday Gazprom stated that Beltransgaz owes $137 million to for deliveries in the first three months of this year. And yesterday it turned out that the concern threatens by limitations to Belarus in case the debt not paid. It has been stated by a source close to Gazprom, and a Russian official taking part in discussions on the matter. Letters with warnings have been sent to Beltransgaz and the government of Belarus, said one of the sources: there is no direct threat there, but Gazprom reminds that sanctions under the contract could be used for debts, and among others deliveries could be limited, Vedomosti newspaper (Russia) writes.

The debt has accumulated because Belarus pays $150 for 1000 cubic metres, say the both interlocutors from the Russian side. Though the price of the first quarter is $169.22 according to the formula in the contract. The fact is that in 2010 Belarus wanted to pay for gas $150, which had been stated many times in late 2009, the official explains: the country has a hard economic situation, a serious trade balance deficit, and the presidential election comes in early 2011.

Sergei Kupriyanov, Gazprom spokesperson, confirmed only that the Beltransgaz debt had been caused by not paying according to the formula. A representative of the Belarusian government denied comments, it was impossible to get comments from Beltransgaz as well.

Belarus and Gazprom had many disputes over prices. Last time in 2009 the situation was very much like today's. In the first quarter the contract price for Beltransgaz was $210.32 per 1000 cubic metres, and the forecast for the entire year about $150. That is why Belarus decided not to spend spare money in the beginning of the year and paid "average annual" $150 from the beginning. By mid 2009 the debt reached $244 mln. And Alexei Miller, Deputy Chairman of the Board of Directors of Gazprom, warned that under the contract the concern could go to court or curtail deliveries. However, matters didn't come to that. By the fourth quarter the price for Beltransgaz reduced to $121.98, a little debt remained, but Belarus paid it.

It would not be possible to repean that, a source close to "Gazprom" states: the forecasted average price for Belarus in 2010 is $185-187. Considering the plan of purchases (about 21 billion cubic metres) it makes $3.9 billion, and at the price paid by Belarus today -- $3.15 billion.

The Russian official claims there are no negotiations on reducing the price, though Belarussian officials keep asking about that.

Moscow recalls the Belarusian gas debt very often, when there are other disputable questions between the countries. For instance, last summer Russia limited access of Belarusian milk goods to the market, and Belarus threatened to tighten the control regime for goods travelling by the main Russian-Belarusian main lines, and Gazprom stated that a gas debt exists (though it had been accumulating for a few months). The conflict was solved over a month.

It is not said by Russian officials whether there are any points at issues now as well. But there is disagreement relating the Customs Union, notes Alexei Portansky from the Trade Policies Institute of the HSE (Higher School of Economics State University), for instance as far as oil duties and import duties for passenge cars are concerned.