Oil conflict: review

Russia-InfoCenter ^ | January 15, 2007 | Olga Pletneva

[eastern]

Hardly had the RF and Byelorussia struck a compromise over gas price, a new conflict flared up between the two countries. This time oil or, to be more exact, the cost of supplies to Byelorussia became the sticking point.

The first oil difficulties came into the picture in December of the last year, when the head of the RF government signed the decree implying oil supplies to Byelorussia are to be imposed export duty on starting January 1, 2007. The decree applies to all the countries cooperating with the RF. The authorities clarify the following decision by the fact of Byelorussia’s one-way withdrawing from the treaty, giving preferences to the Byelorussian party, in 2001. According to the document, Russian oil, as well as any other products, was supplied to the neighbouring country duty-free and consequently cost less. In turn the consumers (oil refineries) had to give 85% of export duty on oil products made from Russian raw material at the Byelorussian territory to the RF budget and 15% - to the national one.

Byelorussia’s withdrawing from the treaty, which actually stopped incoming export duties on oil products to the Russian budget, de facto turned the republic into an “oil offshore zone” processing cheap Russian hydrocarbon materials and selling the products at lower prices, compared to Russian ones.

[M. Espinola]

Very interesting article.

[eastern]

Thank you.