Statistics Committee confirms oil products smuggling under guise of solvents

Belarus does not produce solvents and diluents.

A scheme to export oil products under the guise of solvents and diluents has been created to get super profits due to evasion of export duties on oil products and to increase the GDP growth rate in Belarus. The sad fact was confirmed today by the official statistics.

According to the National Statistics Committee, Belarus exported 2.87m tonnes of solvents and thinners at a sum of $2.526bn in the first six months of 2012. Most of the volume, 2.869m tonnes, was exported to the EU. The export  to the Netherlands was 1.324m tonnes ($1.173bn), Latvia – 1.278m tonnes ($1.115bn) and Lithuania – 254,000 tonnes ($225,4m), AFN news agency reports.

Belarusian economy cannot do without real solvents and organic thinners, which the country does not produce. In the first six months of 2012, Belarus imported 2,335 tonnes at a sum of $5.384m. Imports from Russia was 1,353 tonnes ($2.161m), from Italy – 251 tonnes ($635,100), from Slovenia – 235 tonnes ($521,000), from Germany – 172 tonnes ($739,600) and from Poland – 134 tonnes ($315,300).

The comparison of the average import and export prices gives the final verdict to the solvent scheme.

According to the data of the  Statistics Committee, the average price of solvents and diluents exported from Belarus was $880 per tonne. “By sheer chance”, this figure is almost equal to the average price of oil products export – $860 per tonne.

Meantime, the average price of import of real solvents and diluents was $2,300 per tonne.

Russian companies have suspended oil products supplies to Belarus. The Russian leadership tries to puzzle out the solvent business. It is a decision of top officials of the two countries how results of the investigation will  influence the relations between Belarus and Russia. The presidents and prime ministers will have to decide what to do with participants of the solvent business that deprived Russia's budget of 1.1bn dollars in the first six months of 2012.

Nevertheless, the so called production of solvents and thinners made a significant contribution to Belarus's GDP growth rate – 2.8% for the first seven months of the current year, which fails to show a real picture of the country's economy. As a result it wouldn't be a bad idea to revise the GDP growth  forecast down from 5.5% to 2.5-3%.