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Russia-Belarus agreement on pricing may not last

Russia may withdraw from the agreement with Belarus on equal conditions for pricing that envisages the use of domestic Russian railway tariffs on export and import freight transportation and domestic prices for Russian gas supplies to Belarus, a source in the Russian diplomatic circles told PRIME-Tass.

The agreement was signed in April 2002 and is now used by Belarus as the main argument at the negotiations with Gazprom on prices of gas supplies in 2007. It was signed in a package with another agreement, on setting up jointly with the Gazprom joint-stock company a gas transportation enterprise on the basis of the Belarussian Beltransgaz.

According to the source, the Russian Foreign Ministry addressed a note to the Belarussian Foreign Ministry to set out the stand of the Russian side on its further participation in the agreement, taking into account the fact that Belarus does not fulfil the second agreement in the package.

"This does not amount to the denunciation of the agreement on equal conditions for pricing, as Russia has not ratified the agreement, and it has no legal force. The point is that it must have been ratified in the package with the agreement on creating the joint venture not later than in 2003, but the process stalled," the source said.

"Nevertheless, the Russian government, showing goodwill, has been fulfilling its obligations under the agreement," he added. "Now there is the question whether Russia should continue to adhere to the agreement, specifically, as regards the supply of cheap gas to Belarus. There are no questions regarding railway tariffs. I do believe they must keep, reaching agreement on this at interdepartmental level." the diplomat said.

The formal pretext for raising the matter was the fact that the agreement was concluded for five years, till April 2007, and envisages automatic extension unless one of the sides notifies the other, in the written form by diplomatic channels, of its wish to terminate the agreement not later than six months before the expiry of a regular term.

The Belarussian Foreign Ministry has not yet officially commented on the matter.