Belarus cancels tax on Russia oil shipments |

Belarus cancels tax on Russia oil shipments

MINSK, Belarus – Russian oil began flowing again through a Belarusian pipeline late Wednesday, a top Belarusian oil official said, resolving a dispute between the countries that had disrupted supplies to Eastern Europe as well to the former Soviet Republic.Alexei Kostuchenko, general director of pipeline concern Gomeltransneft-Druzhba, said Russian oil entered the Belarusian system around 10:30 p.m. local time (2030GMT) Wednesday, and was being pumped to Poland, Germany, Ukraine, Slovakia, the Czech Republic and Hungary. He did not give any details about the volume being moved.The spat between the two formerly close, ex-Soviet republics showcased the Belarus regime’s reliance on cheap Russian energy imports, and stoked doubts in European capitals about Russia and its dependability as an energy supplier.”The disruptions in oil supplies have yet again undermined Russia’s efforts to establish itself as a reliable source of fuel supplies to Europe,” Deutsche UFG analysts wrote in a note to investors.The dispute, which had entered its third day, centered on Russia’s decision last month to impose a hefty duty on oil exports to Belarus, with Moscow complaining that the previous duty-free regime cost the Russian budget up to $4 billion a year in lost revenues. Belarus reaped billions in revenues by refining cheap Russia oil products and selling them at hefty profit to European markets.Minsk – whose centrally controlled economy is heavily reliant on cheap Russian energy and duty-free trade with Russia – responded last week by slapping a $45 per ton tax on Russian oil pumped across Belarus to Europe.On Monday, Russia stopped pumping oil to Europe via the Druzhba pipeline – whose name translates as “friendship” – and accused its neighbor of siphoning off oil. By Tuesday, the stoppage had affected supplies to Ukraine, Germany, Poland, Hungary, the Czech Republic and Slovakia.With the European Union voicing alarm and criticism and Russia threatening an all-out trade war against its former ally, the two countries’ presidents – Vladimir Putin and Alexander Lukashenko – held talks by telephone Wednesday.Soon after, Belarus’ government announced the cancellation of the $45-per-ton duty, and Prime Minister Sergei Sidorsky announced he would fly to Moscow on Thursday for meetings with his Russian counterpart.”I hope that within two days we will be able to overcome all disagreements – on oil, oil products and other sensitive groups of commodities on the Russian and Belarusian markets,” he said.Putin’s top economic adviser, meanwhile, reasserted that Russia was a dependable energy supplier. “We act as a reliable partner, and we would like to do so in the future,” Igor Shuvalov said.”We need to understand that that kind of behavior very close to blackmailing can’t be accepted by the Russians. If we do accept it this time, than the future can’t be secured,” he said. “Now we need to act together, the Europeans and the Russians, to avoid this kind of situation in the future.”European Union leaders have strongly criticized the disruptions, which came one year after a price dispute between Russia and Ukraine led to a brief interruption of EU natural gas imports from Russia.Putin took a harsh stance at a Cabinet meeting Tuesday, and told ministers to consider a possible reduction in oil output. Russia has a limited capacity for refining oil and would have to cut crude output if its exports decrease suddenly.Analysts say that Putin has grown tired of supporting the Belarusian leader, who has been dubbed “Europe’s last dictator” in the West for his authoritarian rule and crackdown on dissent. But the disruption of Russian oil to Europe one year after the Ukraine gas cutoff alarmed European officials and led to renewed calls for energy diversification.Russia currently supplies a quarter of the EU’s oil and over two-fifths of its natural gas.—Associated Press writers Vladimir Isachenkov and Alex Nicholson contributed to this report from Moscow.

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