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17 Jun 2020

Sum of Belarus-Russia interbudget oil compensations to be determined after 2020

Sum of Belarus-Russia interbudget oil compensations to be determined after 2020
Dmitry Mezentsev. An archive photo

MINSK, 17 June (BelTA) – The sum of interbudget transactions between Belarus and Russia to provide compensations in oil trade will be determined depending on results of the year 2020. The sum will be many dozens of millions of U.S. dollars, BelTA learned from Ambassador Extraordinary and Plenipotentiary of Russia to Belarus Dmitry Mezentsev on 17 June.

The ambassador commented on the work on the agreement between the Belarusian Finance Ministry and the Russian Finance Ministry on interbudget transactions in oil trade. The Russian state budget is supposed to compensate some of the premiums involved in the sale of Russian oil to Belarus. “I have to assume that the final sum of the compensation or, let’s say, the sum for incentivizing shipments of Russian oil can be determined depending on results of the year. We need to know how much oil the two [Belarusian] refineries have consumed and will simply multiply this incentive sum,” the ambassador.

“We will multiply the volume of delivered oil by the figure that will soon be stipulated by the agreements to be signed. It will be a simple arithmetic multiplication,” he continued.

“As soon as the balance of this year is closed, we will report without hiding anything how much support the Belarusian energy and oil industry has received,” the ambassador added.

Major Russian oil companies stopped shipping oil to Belarus on 1 January due to the absence of an agreement on prices. Belarus believed it was economically inadvisable to pay the same amounts of premiums to Russian companies. Major oil companies resumed deliveries in April. An arrangement was made that Russian companies would supply oil to Belarus without premiums, some of the premiums will be compensated for by the Russian government using interbudget transactions. On 25 March representatives of the Belarusian Finance Ministry said they had started working on the procedure for interbudget transactions in oil trade.

Dmitry Mezentsev noted: “There is no doubt that such an arrangement will be stipulated by a written agreement, a supplementary protocol. It is another result of the special ally attitude of the Russian side towards the brotherly country of Belarus. These are serious steps in response to the request Minsk made in late 2019 – early 2020. It is a considerable sum.”

The ambassador reminded that oil shipment figures were agreed in autumn 2019. Belarus was expected to buy 18-24 million tonnes of Russian oil in 2020.

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