Belarus President Alexander Lukashenko yesterday (22 June) called a halt to gas flows to Lithuania, Poland and Germany following a payment dispute with Russian monopolist Gazprom, speaking of a "gas war," the press in the region reported.
Lukashenko, known as 'the last dictator in Europe', stopped the transit through his country of Russian gas destined for the West, calling on Gazprom to pay $260 million in gas transit fees for the first half of the year. Gazprom owns the pipeline that carries its gas through Belarus.
"I want to inform you about the conflict that, unfortunately, is growing into a gas war between Gazprom and Belarus," Lukashenko told Russian Foreign Minister Sergei Lavrov in Minsk, as quoted by the Moscow Times.
Earlier on Tuesday, Gazprom reduced supplies to Belarus to 70% of the country's needs, increasing the pressure on its neighbour (see 'Background').
Gazprom insists that it is seeking $192 million in unpaid debts after Belarus refused to pay a higher price for the Russian gas it consumes.
Gazprom set prices for Belarus at $169 per 1,000 cubic metres for the first quarter of the year and $185 for the second quarter. Instead, Minsk has been paying $150, RIA Novosti writes.
Gazprom recognises that it owes Belarus $260 million in transit fees.
"We do not owe Gazprom. Gazprom owes Belarus $70 million if any debt is to be offset," Lukashenko said.
No gas for cheese
On Monday Lukashenko acknowledged the debt and proposed to repay it with machinery, equipment and a variety of other goods.
But Russian President Dmitry Medvedev responded by saying that Gazprom could not receive payment for the debt in "pies, butter, cheese or other means of payment".
Lukashenko said Belarus was offended by Medvedev's remarks.
"We take it as an insult when we are lowered to the level of chops, sausages, butter and pancakes," Lukashenko said.
But he said he had found the money to pay Belarus's debts.
"I borrowed the money from my friends today and will pay as soon as possible."
European Commission spokesperson Marlene Holzner said the EU executive had received a letter from Russian Deputy Prime Minister Igor Sechin clarifying the situation with Belarus transit.
She said that if Belarus were to cut gas deliveries to the EU, Lithuania, which fully depends on gas deliveries via Belarus, would be most affected. Poland and Germany would be affected indirectly.
Holzner added that if Lithuania did not receive Russian gas for a week, gas would be delivered from neighbouring Latvia.
Holzner also said that the Commission was calling an emergency meeting to discuss the gas row.
Buzek: Early warning did not work
"The early warning mechanism between Russia and the EU did not work this time," Parliament President Jerzy Buzek said yesterday during a meeting in Moscow with Russian Energy Minister Sergei Shmatko.
The early-warning mechanism was set up on the EU's initiative following the January 2009 gas crisis, when a payment dispute between Gazprom and Ukraine cut supplies of Russian gas to some EU countries.
Shmatko said Russia had alerted the Commission about possible gas supply problems on Saturday and Polish companies were yet to report a fall in pipeline pressure.
"The conflict does not affect Poland in any perceptible way. For now, the pressure in the Yamal pipeline has not fallen," Polish Prime Minister Donald Tusk was quoted as saying yesterday.