Paying for power
June 21, 2010
Russia cut gas supplies to Belarus by 15 per cent on Monday, amid a dispute over missing payments to gas giant Gazprom.
The government in Minsk has promised to settle the outstanding debts, which Moscow says total $192 million (154 million euros), as soon as possible.
"We may not pay up today," said Belarus' first deputy premier, Vladimir Semashko. "But I think that in two weeks we'll find the possibility. We'll borrow (and) we'll settle up."
However, Semashko also pointed to transit fees which he claims Russia must pay to Belarus.
"If they pay us 217 million dollars for transit, we're prepared to pay 187 million dollars of our debt for gas," he said.
Further cuts possible
Gazprom, however, is pushing for a quicker resolution of the situation.
"No one will wait two weeks," company spokesman Sergei Kupriyanov told the Tass news agency announcing a meeting at Gazprom headquarters on Tuesday morning to decide the next step.
The Russian government had initially threatened to cut off 85 per cent of the Belarus supply, leaving just enough to maintain pressure in the pipes. However, Gazprom now says it intends to introduce the cutbacks gradually, a move praised by Prime Minister Vladimir Putin.
"By contract, we are absolutely justified, strictly speaking, in reducing deliveries by 85 per cent or more," Putin said. "But we won't do that because of the special relationship with Belarus consumers."
Belarus relies heavily on Russia for financial and political support, making the current dispute a particularly tense affair.
Gazprom promises no knock-on effect
Russia's gas disputes with its neighbors often cause concern in the rest of Europe. In January 2009, a halt in supplies to Ukraine led to gas shortages in the rest of Europe (especially Eastern Europe) during a winter cold snap.
Belarus, like Ukraine, is a transit nation for the rest of Europe, although Minsk's importance is far smaller than Kiev's in this role. Roughly one tenth of Europe's gas needs go through Belarus, and about one fifth of Germany's.
Over one third of Germany's natural gas is provided by Russia, Austria gets half its gas from there, while Bulgaria and Hungary receive 95 per cent and 90 per cent, respectively.
Gazprom says that lower energy usage during the summer months, coupled with the possibility of rerouting gas through Ukrainian pipes if the dispute with Belarus escalates, should mean that these cutbacks will not impact supplies to the rest of Europe.
Author: Mark Hallam (AFP, dpa, Reuters)
Editor: Michael Lawton