Belarus has settled its $187 million debt to Gazprom for the gas the country has received, First Vice Premier of Belarus Vladimir Semashko told media on 23 June.

“As a gesture of good will after borrowing money while the financial situation in the country is far from being simple Belarus transferred $187 million to settle the debt to Gazprom at 16:00 today,” said Vladimir Semashko.

Recalling the events preceding the gas conflict between Gazprom and Beltransgaz, Belarus and Russia, Vladimir Semashko reminded that at the session of the Supreme State Council on 10 December 2009 the presidents of Belarus and Russia instructed the governments, Beltransgaz and Gazprom to calculate the price situation for 2010 and the years to follow. According to the First Vice Premier, there were reasons for it. Last year saw a sharp increase in oil prices while gas prices are tied to them. As oil prices rose, so did gas prices. Besides, the sides should have taken into account that 2009 was the year of the global financial crisis.

Vladimir Semashko added: “We are the Union State. An agreement was signed in 1998 to enable equal economic conditions. But are they equal when a Belarusian company pays $217 per one cubic meter of gas while in Smolensk the top price stands at $100?”

The First Vice Premier reminded that when the sides signed an agreement on cooperation in gas industry (which the Belarusian side meticulously fulfilled) on 31 December 2006, the sides had the following in mind: by 2011 Belarus and Russia should enforce the equal profit principle synchronously. But back in 2009 it was obvious that Russia dropped the principle and that its steps were at least twice as slow. Officials, members of the Russian government, Gazprom executives have stated that Russia will enable the equal profit principle only by 2015.

“This is why we naturally wanted to correct the documents to take into account these objective circumstances. Fulfilling instructions of the Belarus president, Beltransgaz sent proposals for correcting the basic documents to Gazprom twice, with no comprehensible answer received,” said Vladimir Semashko. “Hoping that we will finally be able to enforce the agreement, some corrections, we assumed that in 2010 the gas price will be about $150. With this in mind payments have been transferred”.

“Yes, the debt of $187 million has accumulated. But on the other hand, today Gazprom owes $260 million to Beltransgaz,” he said.

Vladimir Semashko explained that for ten months of 2009 Gazprom paid to Beltransgaz on time. For the eleventh month of 2009 Gazprom stopped accepting Beltransgaz’s bills, which clearly indicated the amount of gas transit and the tariff - $1.74 per 1 cubic meter per 100 km. Gazprom paid $1.45. This way the debt of $260 million has accumulated. In turn, Beltransgaz fulfilled its obligations concerning gas transit to Europe. Moreover, thanks to low tariffs and the shortest distance Gazprom earns around $0.5 billion in extra profits every year by transiting gas via Belarus.

The First Vice Premier remarked that the Belarusian side has repeatedly suggested clearing payments, but Gazprom has maintained the attitude that mass media have been able to observe over the last few days.

Belarus had to act on good will and be the first to settle the $187 million debt, said Vladimir Semashko.

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