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    Putin says Russia will continue cheap energy supplies to Belarus

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    Russia will continue for the near future to sell oil and gas to Belarus at subsidized rates to support the country's economy, Prime Minister Vladimir Putin said on Sunday.

    NOVO-OGARYOVO, June 28 (RIA Novosti) - Russia will continue for the near future to sell oil and gas to Belarus at subsidized rates to support the country's economy, Prime Minister Vladimir Putin said on Sunday.

    "For the near future we intend to continue this, while bearing in mind the tendency toward switching to world price levels for hydrocarbons," Putin told leaders of factions in the State Duma, the lower house of parliament.

    Putin's pledge comes amid a dispute with Belarus over payments for Russian natural gas, which was massively discounted until 2007.

    Gazprom announced on Friday it had sent Belarus a letter demanding it pay $244 million in gas debts, and warning that supplies could be cut if the sum is not cleared.

    The debt has arisen due to differences between contract and average prices. In the first quarter Belarus paid $210 per 1,000 cubic meters, but by the end of the year this figure should have dropped to under $100. In line with verbal agreements the price should average out at $150 per 1,000 cubic meters.

    Belarusian First Deputy Prime Minister Vladimir Semashko said on Friday that the government expects Russian gas prices to reach $166 per 1,000 cubic meters on January 1, 2010 if oil prices remain around the $70 per barrel mark this year. The rate is still well below the average rate Russia charges European Union countries for its gas.

    The countries have in the past also clashed over Russian oil sales to Belarus, which had also been heavily discounted until the end of 2006. After Russia raised the oil price for Minsk, while keeping it below international prices, Belarus imposed a tariff on oil pipeline transit via its territory, triggering a temporary cut-off in early 2007.

     

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