Russia Reduces Gas Deliveries

Russia's Gazprom on Monday started reducing gas deliveries to Belarus, CEO Aleksei Miller said at a meeting of the state-controlled gas monopoly's executives.

Mr. Miller said that Belarus had failed to settle its $192-million debt for gas supplies despite an ultimatum given by Russia last week, according to Russia's RIA Novosti news agency.

The executive noted that Gazprom would be cutting deliveries to Belarus by 15 percent every day and the gas flow to the country would be finally reduced by 85 percent unless the debt was cleared.
Earlier in the day, Russian President Dmitry Medvedev ordered Gazprom to start reducing gas exports to Belarus over the debt.

Speaking at a meeting with the Russian leader, Mr. Miller said that Minsk acknowledged its debt to Gazprom but "is offering to pay with machinery, equipment and different other goods."

Mr. Medvedev stressed that Russian laws required companies to accept payments from foreign customers only in a foreign currency and said in a caustic remark that Gazprom could not accept "cakes, butter, cheese or other means of payment" instead of money from Belarus.

The Russian president told Gazprom to continue talks with Belarus on the gas debt but acknowledged that "by all appearances, Gazprom will have to make some decisions."

Mr. Miller said that Gazprom would reduce its deliveries to Belarus "in proportion to the amount of the debt" and noted that the cuts would be introduced "gradually, day by day."

A delegation of the Belarusian government, led by Deputy Economy Minister Andrey Filonaw, was staying in Moscow on Monday to hold talks on the matter. Last week’s negotiations between the Belarusian government and Gazprom failed to yield any results.

On June 16, Gazprom warned Minsk that it would reduce gas exports to Belarus if it did not settle its $192-million debt by June 21.

Belarus has run up the debt by continuing to pay for this year’s gas imports at last year’s price. Minsk explains that it has refused to pay a higher price for gas this year because Gazprom has failed to raise its prices for domestic customers.

Speaking on June 18, Eduard Tawpyanets, Belarus’ deputy energy minister, claimed that Gazprom owed more than $200 million to Belarus for gas transit via the country and warned that the gas giant’s possible move to cut deliveries to Belarus could affect gas flow to customers westward.