'Gas Trap' For Regime Due To Russian Ruble's Exchange Rate

Industrial consumers are already paying for the regime's miscalculations.

Prices for natural gas and electricity for industrial consumers in Belarus are set at the rate of the Belarusian ruble against the Russian one. They are indexed to the latter, Belarusians and Market writes.

The gas price was set at $128.52 per thousand cubic meters for Belarus in 2022. Gazprom Transgaz Belarus' trade surcharge is also specified in dollars, used for gas sales to Belarusian wholesale customers. However, the parties decided to switch to the Russian ruble in payments for gas after the introduction of Western sanctions and high volatility in the fx market. In other words, a fixed price in Russian rubles was set until the end of 2022.

To smooth out exchange rate fluctuations, a specific rate - 75 Russian rubles per dollar - was used when calculating the price for consumers.

However, the Russian national currency began to strengthen, reaching a ratio of 55 Russian rubles to the dollar by mid-June. Administrative measures were used to achieve it. Meanwhile, the Belarusian ruble strongly devalued against the Russian one. Historical ceiling was set (4.9 Belarusian rubles per 100 Russian ones). This arrangement increased gas costs for Belarusian consumers.

The government had to adjust its approaches to gas prices for industrial consumers. The decisions apply only to the relations between legal entities and individual entrepreneurs and do not apply to the population.

The authorities wanted to raise tariffs for some housing and utility services in the second half of the year but changed their mind after studying people's real incomes.