Belarus' first deputy premier Vladimir Semashko said Monday that his country will settle its debts with Russian energy giant Gazprom within two weeks, indicating that Belarus would borrow the money required for settling its dues. "We may not pay up today. But I think that in two weeks we'll find the possibility. We'll borrow and settle up," Semashko said Monday. "We do not hide that we have problems with hard currency. Belarus has to resort to borrowing in order to make a payment on time." Pointing out that Russia owed Belarus $217 million in transit fees for using its territory for delivering gas to Europe, Semashko said: "If they pay us 217 million dollars for transit, we're prepared to pay 187 million dollars of our debt for gas."
The move comes after Gazprom earlier in the day said Russian President Dmitry Medvedev had ordered the energy giant to introduce "a regime of limiting supplies of Russian gas to Belarus by 15 per cent of the planned daily volume." The order followed a warning issued by Medvedev last week that natural gas exports to the neighboring ex-Soviet Republic will be discontinued unless it paid off its gas debts within five days. Gazprom claims that Belarus owes it about $192 million after failing to pay increased gas prices. Though Belarus sent an emergency delegation to Moscow on Sunday to try and resolve the payment dispute, the resultant talks with Russian officials ended without resolution. Though the talks continued Monday, Gazprom went ahead with planned cuts and warned that they would be increased to 85 per cent in the coming days if the dispute is not resolved soon.
Russia increased the price of gas supplied to Belarus from $150 per 1,000 cubic meter last year to $169.20 in the first quarter of 2010 and $184.80 in the second. Belarus, however, continued to pay at the old rate of $150 per 1,000 cubic meter, prompting concerns from Gazprom that the former Soviet Republic could end up owing $500 million or $600 million by the end of the year. Though Belarus proposed earlier to pay its dues with "machinery, equipment and various other products," Medvedev insisted that its neighbor should come up with hard cash -- and not goods -- to pay the dues as foreign payments could only be accepted in foreign currencies.
Despite being close allies, Russia and Belarus have had several rows in recent years, particularly over energy supplies. Like Ukraine, Belarus remains heavily dependent on Russia to meet its energy needs, and a considerable proportion of Russian oil and gas exports to Europe pass through its territory. Earlier, Russia had cut gas supplies to Ukraine in January 2009 over Ukraine's pending gas debts. The move disrupted Russian gas supplies to Europe, which depends on supply of Russian gas through pipelines laid across Ukraine for most of its gas requirements.
