Putin ties lower gas price for Belarus to creation of supranational bodies

Russia may start selling natural gas to Belarus at its domestic prices only if the governments of both countries delegate vast powers to supranational bodies, Vladimir Putin said at a news conference in Moscow on December 19.

Photo by kremlin.ru

The remarks came one day before the Russian president is scheduled to meet with Aliaksandr Lukašenka for a new round of talks on deeper integration between the two countries.

Mr. Putin stressed that Russia supplied gas to Belarus free of export duty and at the lowest possible price for a foreign customer. “This is $127 per 1,000 cubic meters,” he said. “We sell [gas] to Europe at more than $200 [for 1,000 cubic meters]. Our weighted average price in Russia is $70.”

Commenting on the Belarusian government’s mantra that the country should pay for gas as much as customers in Russia’s Smolensk province do, Mr. Putin stressed that the region enjoyed heavily subsidized gas. “The Smolensk province consumes in the region of two billion [cubic meters of gas annually] while we sell 20 billion [cubic meters] to Belarus,” he said. “And if we subsidize [gas for] the entire Belarusian economy, that means that we, Russia, subsidize a basic energy resource such as gas for an entire country. You must admit that this is a very weird matter.”  

The Russian leader added that Belarus could enjoy subsidized gas if the two countries adopted “common rules in the form of laws, including in the sphere of taxation, in the sphere of the policy of subsidization, in the sphere of payments out of budgets at different levels to support some sectors or other,” he said. To this end, he warned, Russia and Belarus need to have a single money-issuing authority and a single audit chamber and pursue a single antimonopoly policy “and maybe even have a single [antimonopoly] body.”

“This is a huge amount of work and it may be done only in case there is political will and eagerness on both sides,” Mr. Putin stressed.

“We have such eagerness,” he said. “We have been discussing that with our Belarusian partners, have made considerable progress. But it’s unclear so far what we will manage to agree upon. It would be a mistake on our part to get ahead of ourselves and start subsidizing Belarus, which we are not ready to do now amid uncertainty over the development of the Union State.”