Gazprom to increase gas price for Belarus to $250

This is 35-39% higher the average annual price in 2010 and 67% higher the price Beltransgaz pays for gas now.

Gazprom is ready to settle a contract with Beltransgaz on gas supplies to Belarus in 2011 in the amount not greater than 22.5 billion cubic meters at a total sum of $5.625 billion, the materials to the Gazprom annual general shareholders meeting say, Interfax informs.

Thus, the average gas price for Belarus in 2011 may amount to $250 per 1,000 cubic meters, which is 35-39% higher the average annual price in 2010 ($180-185 per 1,000 cubic meters) and 67% higher the price Beltransgaz pays for gas now.

As it was reported, under the 4-year contract on gas supplies to Belarus, Beltransgaz is to buy gas on equal income basis in 2011, which means the company is to pay average European price minus export duties taking into account a short transit route. The contract provides for a phased transition to the equal income principle of pricing using decreasing coefficient for gas price during previous years. The coefficient was 0.9 in 2010, 0.8 in 2009, and 0.7 in 2008.

In accordance with top level arrangements, a coefficient of 2008 (0.7) was preserved for Belarus for 2009. Belarus counts on preserving the same coefficient this year explaining its position by Russia’s refusal to increase Russian domestic gas price to equal income level from 2011, as it was planned in the 4-year contract in December 2006.

As a result, Belarus has been paying $150 for 1,000 cubic meters since the beginning of 2010, though the contract price was $169 in the first quarter 2010 and $184 per 1,000 cubic meters in the second quarter.

Gazpom says Belarus’s debt is $192 million and fears it may grow to $500-600 by the end of the year.