Belarus raises Russian oil transit fee more than 30%

10:17, 15 February 2007
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Starting from February 15

Belarus will increase rates for the transit of Russian crude through its domestic pipeline network by more than 30% on average starting from February 15, the republican economics ministry said Thursday, according to RIA Novosti.

Belarusian pipeline operator Gomeltransneft Druzhba said it will raise tariffs by 35%, to $3.50 per metric ton of oil along the Unecha-Adamova Zastava route, and by 31.6%, to $1.50 for transit along the Unecha-Brody route.

As a result, the average oil transit tariff will be $0.60 per ton for every 100 kilometers (60 miles), which corresponds to Russia`s domestic tariffs, the Belarusian economics ministry said.

The Druzhba (Friendship) pipeline extends for almost 2,000 kilometers (1,300 miles) across Belarusian territory and pumps on average up to 80 million tons of Russian oil per year to Germany, Poland and Ukraine.

The previous transit tariffs were introduced in 1995, and have not been changed until now. The new oil transit rates will yield an additional $50 million a year for Belarus, said Alexei Kostyuchenko, director of Gomeltransneft Druzhba.

Although the ex-Soviet neighbors declared their intention in 1997 to build a Union State envisaging a common economic, customs and political space, the negotiations have been complicated by a host of issues, in particular a recent energy row.

Russia halted deliveries to Europe via the pipeline January 7, saying Belarus was illegally tapping oil following a tit-for-tat price and tariff dispute.

Belarus imposed a transit levy of $45 per metric ton of crude after Moscow doubled the price of natural gas and introduced a duty on oil supplies to Belarus as of January 1.

The interruption in supplies affected Germany, Poland, Hungary, the Czech Republic and Slovakia, and further damaged Russia`s reputation as a core energy supplier to Europe following a similar energy row with Ukraine involving natural gas in early 2006.

Russia agreed to resume supplies after receiving a Belarusian government resolution abolishing the transit levy on Europe-bound Russian oil.

The standoff triggered more accusations in Europe that Russia is using hydrocarbons as a political weapon, and discussions on the need to diversify energy sources.

At the same time, Russian Economic Development and Trade Minister German Gref earlier said Russia`s consent was required for Belarus to charger higher rates for oil transit.

"This can be done only through a bilateral agreement," Gref said, adding that Russia is studying the rates proposed by Belarus, and that Russian pipeline monopoly Transneft is making the needed calculations.

"If these rates comply with the existing rate indexes, I believe it is acceptable," Gref said, adding it was too early to speak of any retaliation measures.

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