26 February 2020, Wednesday, 4:06
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Economist: Lukashenka’s ‘Oil Emirates’ Turned Into Pitiful Sight

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Economist: Lukashenka’s ‘Oil Emirates’ Turned Into Pitiful Sight
Photo: TASS

The whole world is switching to electric cars.

On the evening of February 7, the negotiations between Lukashenka and Putin on oil and gas prices for Belarus ended in Sochi. The Belarusian dictator left the Russian resort without any statements for the press.

The results were announced by Deputy Head of the Putin administration Dmitry Kozak, who said that the price of gas for Belarus in 2020 will be $ 127 per 1,000 cubic meters. On the eve of the talks, Lukashenka demanded that the price should be at the level of the Smolensk region of the Russian Federation - $ 70 per 1,000 cubic meters.

On Sunday, February 9, First Deputy Prime Minister Dzmitry Kruty, following the results of the Sochi talks, said that now Belarus will buy Russian oil at prices “that are set on the world market.”

What does this mean for the Belarusian economy? Head of the Strategy Analytical Center Leanid Zaika is answering the questions of Charter97.org:

- Before the start of negotiations, Lukashenka said that the “moment of truth” was approaching. What do you think - did this moment come for him and what does the “Sochi truth” consist of?

- About the “moment of truth” he said beautifully, of course. I almost burst into tears. But, unfortunately, I am an economist by profession, so I didn’t let a tear go, and there is no “moment of truth” here. Russia has clearly shown its reinforced concrete position, and there is nothing to argue about. We need to figure out what will happen next, otherwise today we are already taking oil, like the last cucumber from the refrigerator, and we are taking technical oil from the pipes.

Point one, the gas. This is all ridiculous to me. During the time of Boris Yeltsin and in the 2000s, gas at the places of its production in Russia was $ 15 per thousand cubic meters. And the Sochi $ 127 is the money for the guys from Gazprom, and those who own their shares. The amount of $ 127 is a price higher than the cost of short-term gas agreements that operate in Europe now (a little more than $ 100). And in the future, gas will become cheaper. Oil too.

Today, on this issue, everyone suddenly began to quote Deputy Prime Minister Dzmitry Kruty, who is a forester by profession.

Belarusian population buys gas for $ 200. Personally, I specifically looked at how much they take for a thousand cubic meters of gas - $ 200. Therefore, do not lie that we are buying expensive gas. We take it for $ 127 from Russia, and sell it to our citizens for $ 200. And everyone is discussing how much they bought from Russia. No! Let's discuss why they sell it to us so expensively. Who benefits from the difference? They are silent about this, and local journalists are also silent. They cannot say: “Citizens, do not do this, because Kruty buys at the price of $ 127.”

Now oil. In Russia, it was and is cheaper than on the world market. At the time of the “guarantor of the Russian democracy” Yeltsin, Russia sold us oil at $ 15 per barrel. At that time, all economists said that the price of oil and gas was practically synchronized. Now the oil price is somewhere around $ 60, and if we have a discussion with Russian economists, we have the right to say: “Guys, gas should also cost $ 60. And since you overstate, then you live well.”

7 million tons of oil a year is enough for Belarus, and 15 million is oil intended for the interests of the groups close to the Kremlin and Lukashenka. This is the money of the oil mafia, that is why they cannot resolve the issue. Who will deceive whom? Who will defeat whom? This is what interests them. For the Belarusian proletariat, this is the most important thing to know.

I welcome the increase in oil prices in Belarus, moreover, I would ask the Kremlin to raise the price to $ 300 per barrel altogether, which would be three times more expensive than on the world market. The more expensive the oil, the faster we will get rid of the dependence on the Russian oil.

Oil is a product of the past, like boots or hats with tassels, it is a product of a passing oil and gas civilization. Belarusians are stuck in this phase, and are constantly arguing with Russia on how to preserve the past.

The whole world is switching to electric cars, scooters, motorcycles, buses, and we are looking for oil: both inside the earth and among Russians. The more expensive the oil, the faster the verdict will come to the regime that is addicted to yesterday and oil, as if it was some drug. There is such a specific form of assessment - the “oil curse”. Belarus, like Russia, also became infected with it.

- What awaits Belarusian oil refining in these conditions? Will the so-called “oil emirate” end for Lukashenka and his close associates?

- I am glad that the expression “oil emirate” of Lukashenka is actively used, because it was me who invented it once. So: the “emirates” will be a thing of the past. These two plants at the time of the greatness of oil accounted for 40% of Belarus' exports. The guys from the villages who sat in the government thought that this could live on for a long time. Others told them: “You are in a terrible situation. You no longer need these two plants so much.”

I spoke in Vitsebsk last year, and asked officials what they would do with their petrol when, in 2025, the production of petrol engines would be generally banned in Europe. They could not answer, only their eyes widened.

There are two important points no one believes. First: Belarus has $ 40 billion of debt in total (private, banking, state), and the second - a new era begins in 2025, when the need for the Mazyr and Navapolotsk petrol in Europe will be minimal. Who will buy fuel? Unless those who will still have old cars, plus the military.

Petrol is a thing of the past. Instead of discussing the creation of robots, electric vehicles, IT development in Belarus, they are circling and running around gas barrels. A pitiful sight.