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July 11 – July 17, 2011

Belarusian Oil Refinery is detrimental

The situation has not changed
Belarusian Oil Refinery is detrimental

Regardless of the benefits provided by the government to the refineries, Naftan and Mozyr refineries topped the list of the most unprofitable businesses with a net loss in the first half of 2011 of Br 205.6 billion and Br 184.306 billion respectively.

Concern “Belneftekhim” has reported that almost half of its enterprises have reached positive trade balance of over $ 2 billion and met all the planned goals.

The average rate of premium to Russian oil suppliers during the first half of 2011 amounted to about $ 6 per 1 barrel, or more than $ 44 per 1 ton (increased by 4 times). The Belarusian authorities believe it puts the Belarusian refiners in unequal working conditions within the EEA and makes refining at Belarusian enterprises unprofitable.

Comment

Regardless of the abolition of export duties on Russian oil Belarusian oil refineries could not make profits, which reduced their attractiveness to investors significantly.

With regard to the positive balance of $ 2 billion reported by “Belneftekhim”, it is not quite true. The concern management is manipulating figures, in particular, while calculating the balance in the composition of export earnings it also accounted for export duty on oil products, which Belarus is obliged to transfer to Russia. Bearing this in mind, in the first half of 2011 “Belneftekhim” should have paid to the Federal Budget over $ 1.2 billion, which implies the real trade surplus of the concern is about $ 800 million

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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