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24 Jan 2020

Belarus president talks about reasons behind problems with buying energy from Russia

Belarus president talks about reasons behind problems with buying energy from Russia

SHKLOV, 24 January (BelTA) – Belarus President Aleksandr Lukashenko talked about reasons behind problems with buying natural gas and oil from Russia as he addressed personnel of RUP Shklov Newsprint Mill on 24 January, BelTA has learned.

Aleksandr Lukashenko said: “The disagreement and the conflict with Russia have been caused by their demand that we should buy oil at prices higher than the world one.”

One of the Shklov Newsprint Mill workers asked a question about the country’s energy security. Aleksandr Lukashenko responded: “We are working on it. Very difficult, very complicated. You know why. Political and economic considerations are at play. But mostly political. It is my area of expertise. We will set things straight. But we will not be supplicants to anyone.”

Aleksandr Lukashenko added that Belarus has been moving towards the global oil price for about five years already. He explained what the conflict with Russia is actually connected with: “With the old Russian government that President Putin has fired.”

Aleksandr Lukashenko reminded about changes in the taxation of the Russian oil industry (the so-called tax maneuver), which makes Belarus lose a lot on export customs duties. “About five or six years ago we used to receive oil with half of the customs duty. But they have tweaked things since then. They’ve taken away the half that we used to get by selling oil products – our own products. It would have been awkward to take them away from us so they went ahead with the tax maneuver – they introduced a tax on the extraction of mineral resources in Russia, thus inflating the oil price. They’ve pushed us closer to the global price in increments of 15-20%. At present we get only 18-20% of this customs duty,” he said.

“We presented our concerns: dear elder brother, you cannot act like this, you cannot take us for fools by taking away this and taxing that. Exactly on the cent, on the dollar. Not more, not less, but exactly that much. When we started looking into the problem, the people that worked out this legislation told me directly it had been done specifically in order to put pressure on Belarus,” the head of state said. “Take a guess why they wanted to pressure us. Various theories and conclusions have been presented. You’ve heard them. And all of them may be viable to an extent.”

Aleksandr Lukashenko also presented his view on the price for the natural gas Belarus buys. The country does not ask for a low price but insists that prices should be equal with Russian ones so that Belarusian and Russian companies could compete on equal terms. “When we sold them our Beltransgaz pipeline, after paying a small amount of money (I’d say they have virtually recouped that investment of $5 billion) they promised that the price Belarus pays will be equalized with Russian ones. But they forgot about it after some time. I talked to the president of Russia a short while ago. I told him directly that I remember this part of the deal. This is why you are free to set your own gas price while we will act on the basis of our own interests whatever the cost,” the president said.

As for oil, according to Aleksandr Lukashenko, Vladimir Putin raised the issue himself during negotiations in St Petersburg. “He wondered why Belarusians have to buy oil from Russian companies at prices above the world one,” Aleksandr Lukashenko said. He added that Russian companies also demand a premium on top of the world price. “$15-16 per tonne. If you multiply it by 24 million tonnes, you will get a hefty sum of money,” the head of state stated.

“I didn’t raise the issue. He did. After some time the view changed. I wondered why. But heads of companies and smart operators in the government, who are connected to the oil pipeline, had already riled him up by saying Russian companies would lose a lot on the deal. I said okay, we are not going to talk about it on the phone, once you are done with your work, the address to the parliament and the rest, we will meet face to face and will see what we can come up with,” Aleksandr Lukashenko said.

“As for natural gas, they went back on the deal – they failed to offer us equal prices. As for oil, they want us to pay higher prices than Poles and Germans do. Who does that?” Aleksandr Lukashenko was indignant.

“We cannot fight their decision to price their commodity like that. It is up to them to decide. Including due to political considerations, including due to President Lukashenko’s unwillingness to negotiate. Now they are hyping it up in all the mass media. I absolutely can negotiate. But what kind of a union is that when we started out with a surplus in Belarus-Russia trade and now we have a deficit of $9 billion. And things get worse and worse every year,” the Belarusian leader stated.

“They’ve miscalculated things. They thought that, figuratively speaking, they will give me keys to the barn and I will rush towards Russia, that I will also be rich, fluffy, white, and beautiful… I don’t want that. I will work in my own country whatever the cost,” Aleksandr Lukashenko noted.

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