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Russian govt. okays $1.5 bln loan for Belarus to pay energy debt

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Russia's finance minister said the government had given informal approval for a $1.5 billion loan for Belarus to buy Russian natural gas following price hikes.
VLADIVOSTOK, July 27 (RIA Novosti) - Russia's finance minister said the government had given informal approval for a $1.5 billion loan for Belarus to buy Russian natural gas following price hikes.

"This is a preliminary approval, and the final decision will be adopted by the government in the form of budget amendments," Alexei Kudrin said. The government plans to amend the 2007 budget in October.

In late February, Belarus asked Russia for the loan to cover energy price hikes introduced by Russia earlier this year. Russia, which has been seeking to gain control over Belarus's Europe-bound pipelines, doubled the gas price for its neighbor to $100 per 1,000 cubic meters from January 1. The energy dispute between the two countries triggered new accusations in Europe that Russia is using oil and gas as a political weapon.

Since then, Belarus, whose economy had relied heavily on low energy prices from its former Soviet ally, has been paying only $55, and its debt reached $400 million by late May.

In mid-May, Russian state energy giant Gazprom [RTS: GAZP] signed a deal to purchase a 50% stake in Belarusian pipeline operator Beltransgaz for $2.5 billion.

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