Posted on 06/01/2006 1:41:01 PM PDT by sergey1973
PRAGUE, June 1, 2006 (RFE/RL) -- For more than a decade, Russia's relations with Alyaksandr Lukashenka's Belarus have been a fairly predictable affair. Moscow provided cheap energy, and Minsk returned the favor with absolute political loyalty.
There were even moves to solidify the partnership by forming a union state -- a largely symbolic political marriage with elements of economic and military cooperation. But threats by Russia's state-controlled Gazprom to charge market prices for natural gas may upset the balance of the relationship -- and put at risk the generous social-welfare state that has kept Lukashenka popular despite his autocratic tendencies.
Barely two weeks had passed since authoritarian President Alyaksandr Lukashenka rode to reelection March 19 on promises to maintain economic stability and a social safety net in Belarus.
Then Gazprom made a worrying announcement. After years of generous gas subsidies, it was time for Belarus to face market realities and triple or even quadruple the price it pays for natural gas.
It's a threat Gazprom has made repeatedly with its CIS neighbors -- but with a difference.
(Excerpt) Read more at rferl.org ...
Do those prices reflect diffferences in transportation costs or are they simply negotiated separately?
Basically, there 3 theories behind the latest Gazprom moves:
1. Kremlin is tired of Lukashenko games with the proposed Russia-Belarus Union and wants him to speed up union with Russia using Gas price hike as an incentive.
2. Kremlin wants to take over control of Belarus Transit Pipes and is forcing Lukashenko either to accept Gazprom offer or pay Market Prices.
3. Kremlin is tired of subsidizing Lukashenko regime with bargain gas prices and simply wants to end this special relationship with his regime.
Theory #1 while possible is least likely. For ambitious authocrat like Lukashenko, the Russia-Belarus union is not really desirable. In such a union, Lukashenko will be at best a junior partner and at worst a governor of Belarus Province in Russian Federation that could be removed now by Putin. For self-loving Lukashenko, to be anything less than a tyrant on top answering to no one is very unlikely. I think Kremlin knows this too.
Therefore Theories #2 and/or #3 look more likely to me, although I could be wrong as anyone.
I think transit prices are negotiated separately and are not counted in the chart.
Transit fees are separate.
The reason I put 3 theories, Gary, was that at the beginning of the 2006, the price for Belarus was at $47.
Now a few months later there is this sudden shift to market prices. So other theories have their probability too, although I think theory #3 is more likely than others.
Actually the stated reason (by Russian "political observors in Moscow") is to force Lukashenko's hand into eliminating any barriers to a full union. As it stands, Belarus is all take and no give and Moscow is sending a strong message.
Frankly it'd be better for the Belarussians to join up with Russia, and for Lukashenko to go the way of other Soviet dicators.
They would be better off... I'm still banking on one of h is one to do away with him. He's been "lucky" that the Russians have been propping them up economically, now that this seems to be in jeopardy I wonder how long he'll be able to stick around (which is probably what the Russians are up to).
I think they people would be a lot better off, and FAR better off then with some nationalist foreign picked zealot opressing everyone who doesn't wear their color.
Russia was required to raise prices to gain WTO membership. I am quite sure that Belarus has some sort of backdoor deal with Russia to get gas at a lower price from russia. It can't be made public because it would violate WTO regulations.
We'll trust you're expert assumptions ^_-.
Not!
It is the truth, however. This means that Russia won't be able to sell to China below world price either.
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