Business news

Vladimir Semashko said the agreement of 29 May 2014 stipulates that the supplies of oil products to Russia will continue as long as their selling price, according to the netback pricing method, is not lower than the price in Europe. “This means that we can suspend the supply of oil products to Russia if our enterprises start incurring losses,” he stressed.

It is an open secret that the price for the oil delivered to Belarusian companies is different from the domestic one. The price for imported oil already includes the cost of delivery. In Russia, the vertically integrated oil companies have their own refineries, and these refineries get oil at a lower price. “Belarus has a different pricing formula. Therefore, the production cost of our goods is much higher. For instance, in 2015 our company Naftan received only $0.6 in revenue per tonne of processed oil,” Vladimir Semashko said.

At present, the difference in price for the gasoline shipped to Russia and the EU ranges from $80 to $100. “We cannot sell gasoline at a loss to ourselves. It will be a crime to make our refineries sell their products at a price lower than the production costs,” Vladimir Semashko emphasized.

He added that the Russian Federation fully fulfills its obligations under the agreements. “We are grateful to Russia for the decision to increase oil supplies to Belarus by one million tonnes in 2016. The decision is laid down in the oil and oil products balance. According to the balance, Belarus will deliver one million tonnes of motor gasoline to Russia. We are not going to give up on our obligations. However, I stress once again, that our oil products will be sold at a price that, bearing in mind the netback pricing method, is comparable to the prices on other markets,” Vladimir Semashko said.