Experts: Lower gas price for Belarus implies single RUR zone

Russia’s reluctance to lower its gas price for Belarus may result in a gas war as both sides are unyielding, experts say.

Senior Expert at the Department of Economics of the Institute for Energy and Finance Sergey Agibalov is sure that Gazprom is right here. “Belarus enjoys one of the lowest prices. If the Belarusians want an even lower price, a price equal to Russia’s Smolensk region, they should agree to a higher level of integration, like single RUR zone,” the expert says.

“This is a big problem for Gazprom. Belarus is a big gas consumer and even a small discount will result in huge losses. Today Gazprom is not in a position to support Belarus,” Agibalov says.

He expects the Belarusians to be persistent and advises Gazprom to be tough.

Director General of the National Energy Security Fund Konstantin Simonov says that both sides are unyielding though both of them wish to avoid a conflict. “Belarus continue paying the price it considers to be acceptable. This is a strange policy. Gazprom Transgaz Belarus is Gazprom’s subsidiary. It pumps a lot of gas. So, Gazprom will not be able just to turn off the pipe. In summer consumption is low. So, now things are not as dramatic as they may get in winter,” Simonov says.

He wonders how this problem will be solved. “The money Belarus is not paying is regarded as a debt but it is not clear if this debt will be repaid or not. For the time being both sides are waiting to see what happens. We are not taking any tough measures – and the only measure here is to turn off the pipe,” Simonov says.

Earlier EADaily quoted Russia’s Energy Minister Alexander Novak as saying that Gazprom’s price for Belarus is fixed in their contract and is $132 per 1,000 c m but in May the Belarusian energy minister said that the fair price was $73 per 1,000 c m.