Talks in Moscow Collapsed: Gas Price to Increase for Belarus

Russian monopolist Gazprom didn’t agree to preserve significant discounts for gas supplies to Belarus in 2010.

Russian Kommersant newspaper informs about this referring to own sources in the company.

Alexey Miller, chairman of the Company’s Management Committee, and Uladzimir Syamashka, first deputy prime minister of Belarus, discussed in Moscow yesterday the preliminary operating highlights for 2009 in the natural gas supply and transit sector.

As Gazprom press center informs, the parties also discussed the issues of cooperation deepening. Other details of the talks are not reported.

According to experts of oil and gas market, Miller and Syamashka discussed the volumes and cost of supplies and transit of Russian gas in 2010.

As Kommersant’s source reports, Gazprom insists on increasing the year average price for Belarus from 146 to 164 dollars per 1,000 cubic meters. The Belarusian party can’t agree on this variant. Referring to the fact that Russia postpones establishing equal income prices at domestic market, the Belarusian government lobbies preserving the current costs for 2010.

In 2006, Gazprom and Beltransgaz signed a gas supply and transit contract for 2007–2011. According to the contract, Minsk has a 33% discount for gas price in 2008, a 20% discount in 2009 and 1 10% discount in 2010. The contract terms were violated in 2009 – Gazprom agreed on a 30% discount amid crisis.

Minsk states Gazprom should preserve the current preferences at least for a year, because gas spot prices continue to drop in Europe.

The Russian embassy in Belarus has already said that Belarus hurried to consider equal income approach to selling gas, as Russia hasn’t made a final decision on the delay for domestic consumers yet, said Andrei Kuznetsov, the economic advisor at Russia’s Embassy in Belarus.

Gazprom CEO Alexey Miller told in an interview to "Vesti" on Russia TV channel that gas prices for Belarus would be increased gradually in accordance with the contract signed.

"We have a contract, providing for gradual increase in gas prices for Belarus, so we must act in accordance with the contract. The Belarusian party signed the contract, so the Belarusian party must fulfil its obligations," Gazprom head said.