Russian oil to cost us much

Increase of duty on Russian oil will lead to unprofitable oil processing industry, and make Belarus be more dependent on foreign crediting.

“Even in the conditions of transition to market prices oil processing industry doesn’t bring profit any more, as it was when the energy was cheap, and demands investing from the budget. Even today, not oil processing plants feed Belarusians, but Belarusians support oil processing plants, that is absurdly of its own. New oil duties is a convincing proposal for Belarusian authorities to refuse from the existing situation and start up serious structural reforms,” economist Yaraslau Ramanchuk said to the Charter’97 pres center, commenting the information about increase of custom duty on Russian oil for Belarus by 14.3 per cent since 1 January.

“Increase of custom duty on raw oil for Belarus is in congruence with world price growth dynamics, that again proves Russia’s statements on transition to market conditions with Belarus are serious. Only taking into account energy price growth in 2008, Belarus will receive at least additional 30-40 per cent to the level of negative balance of foreign trade of 2007,” the expert thinks.

Taking into consideration the negative balance of foreign trade exceeds USD 3 billion, it will seriously influence overall balance of payments of the country, according to Ramanchuk, and economy lending rates will increase considerably. But the economist thinks the main problem is not in the hike in energy prices, but in the structure of Belarusian economy, which didn’t answer demand and technological level of the world market today.

Nevertheless, according to him, political will is needed for structural reforms, but “the present authorities can’t suggest anything except for formal changes, for example, agricultural towns. They are just imitating certain reforms. So in 2008 the regime will make their citizens to be debt addicts, pushing the economy into corner, which would be difficult to get out.”

According to the information of the Belarusian National Bank, Belarus’ foreign debt amounted to USD 9.676 billion on 1 October. It grew by USD 3 billion, or 43.6 per cent. But Belarus received a Russian loan of USD 1.5 billion at year-end. It means the total debt of 2007 can exceed USD 12 billion.

Yaraslau Ramanchuk notes that “today’s official economists understand well that the reason of arising problems in the economy is not high prices for energy, but absence of structural reforms. It’s necessary to sold enterprises to private persons, when investors will be able to determine ways of restructuring. But what economy’s meat, is the present regime’s death. And everybody understands it well,” the economist says.

It should be reminded that index of custom duty on raw oil delivered from Russia to Belarus has been increased from 0.293 to 0.335 since 1 January. It means in real figures the rate was increased from USD 90.86 per ton to USD 92.26 per ton, or by 14.3 per cent.

By the way, the duty will be increased again by 21.2 per cent, in other words, from 92.26 to 111.82 dollars per ton of raw oil.