Russia-Belarus dispute cuts EU diesel supplies

Germany's 'diesel summit' doesn't undo the damage of dirty diesel cars.

Russia will not restart oil supplies to Belarus, halted due to a pricing row, until at least 20 January, when the heads of both governments are scheduled to meet, official sources announced today (18 January).

The standoff has already resulted in Minsk suspending diesel exports to Europe, though Russian crude oil supply to Poland and Germany via Belarus along the Druzhba pipeline remains intact.

The Russian government website said Prime Minister Vladimir Putin will meet his Belarusian counterpart Mikhail Myasnikovich on Thursday in Russia to discuss "bilateral cooperation in energy sphere," among other issues.

The meeting is also scheduled a day before the possible inauguration of Belarussian President Alexander Lukashenko, who was re-elected in December. The date for the inauguration has not yet been officially confirmed.

On Monday, Russian Deputy Prime Minister Igor Sechin, who oversees the energy sector, met Belarus First Deputy Prime Minister Vladimir Semashko for the oil supply talks, government sources told Reuters.

"It was a preparation for the Thursday meeting [between Putin and Myasnikovich]," a source said.

The disagreement over prices came to the fore after Minsk entered a free-trade zone with Russia and Kazakhstan, and Russia subsequently dropped export duties for its oil supplies to Belarus.

Russian companies are still in talks with Belarus on prices of oil destined for Belarus refineries, which have a daily capacity of 360,000 barrels.

"It is expected that the prime minister will discuss the oil supply issue with Putin. As the matter cannot be resolved by companies, it goes up to a more higher level," said a Belarus government source.

The Russian firms are asking for a $45 rise per tonne as Belarus will increase transit tariffs by 12.5 percent from 1 February and crude oil prices on international markets have shot to two-year highs.

Russia had been scheduled to deliver 1.5 million tonnes of oil to Belarus in January.

In December Russia and Belarus agreed that Moscow would drop duties on crude oil exports to Belarus from next year if Minsk hands Moscow all the duties it gets from exporting products made from Russian oil.

"Considering the global agreement is signed I think both sides will be able to reach a compromise on details. There is a certain optimism," said Andrei Derekh from Uniter investment company in Belarus.

(EURACTIV with Reuters.)

EU foreign policy chief Catherine Ashton and her US counterpart Hillary Clinton strongly condemned violent repression by the Belarusian authorities of protests following presidential elections held on 19 December, which observers say were rigged.

The president of Belarus, Alexander Lukashenko, widely known as 'Europe's last dictator', controls his country with an iron fist.

Last summer, Lukashenko called on 22 June a halt to gas flows to Lithuania, Poland and Germany following a payment dispute with Russian monopolist Gazprom, speaking of a "gas war".

Days later Russia resumed gas supplies through Belarus after paying gas transit debts. But the gas row left a bitter aftertaste in EU circles, reinforcing mistrust in Russia as a reliable gas supplier and in Belarus as a transit country.

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