"Gas aggravation" at the "Belarusian front"

At a meeting of Russian president Dmitry Medvedev with Gazprom CEO Alexey Miller on June 15, 2010 quite strong statements were voiced that may testify to the serious toughening of Russian-Belarusian energy and political disputes. Miller directly said there were reasons to reduce gas supplies to the neighbor pro rata its debts to Gazprom (some $200m). The main news is that this proposal of the gas monopolist was personally approved by Dmitry Medvedev, who suggested giving the Belarusian side five days to pay off the debt. According to the Russian president, if there is no progress, "strict measures will have to be taken".

It is indicative that such a stern position towards Minsk was previously taken by siloviki - problems in relations with Europe and transit states play into their hands making it easier for them to substantiate the necessity of redirecting energy exports to China. Now Minsk is demonstrated that Russia's inner elite groups are close to reaching a consensus on the necessity of exerting pressure on Belarus. From the point of view of deterioration of Moscow-Minsk relations, the pro-Chinese clans inside Russia will benefit most.

If a compromise with Minsk is achieved (e.g. supplies of hydrocarbons at Russian domestic prices in exchange for valuable Belarusian assets such as Beltransgaz and major refineries), the number of beneficiaries will be much higher. Among the winners there will be adherents of an old idea of maximizing guaranteed supplies of Russian gas to Europe. This may be done by gaining control over major export routes (including those running through Belarus) from the post-Soviet space to the West. Belarus would also benefit from exchanging Beltransgaz and some refineries for cheap gas. The period of Gazprom's transfer to the principle of equal profitability of gas supplies on Russia's domestic market may get prolonged, and in this period Belarus will manage to save substantial funds. Meanwhile, Belarus needs these funds now; it is well known that the country's budget is suffering from the shortage of revenues that were previously ensured by exports of petroleum products to Europe that were produced from the Russian oil supplied duty free.

By Stanislav Mitrakhovich, NESF leading expert