Belarus hopes for deferment of gas payment

The deferral of payments will enable the country to make substantial savings, critical for the treasury at the moment. As well, it will bring down the foreign currency demand, affecting the overall balance of supply and demand of foreign currencies and the ability of the National Bank to inhibit the USD growth.

Belarus and “Gazprom” have nearly completed negotiations about the gas price in 2012, the agreement will be finalized during a meeting of Dmitry Medvedev and Alexander Lukashenko, Prime Minister of Russia Vladimir Putin said.

Belarus wants to deferment the payment for gas delivered in 2011 till 2012.

Belarus proposes either to distribute the amount due for gas delivered in 2011 equally through 2012, or to make quarterly payments, or to include debts into the gas price. According to unofficial information, Belarus has already received a prior consent of Russia to deferment the gas payments, currently the gas price for Belarus is under discussion.

Bearing in mind that, according to the National Statistics Committee, on 1 August Belarus had no gas payments arrears, the amount of debt in question had accumulated since July.

The National Statistics Committee data published on 14 October, quotes that arrears of Belarus for gas by 1 September amounted to Br 267.4 billion (USD 50 million calculated by the NBB exchange rate of 1 September). Bearing in mind that, according to the National Statistics Committee, on 1 August Belarus had no gas payments arrears, the amount of debt in question had accumulated since July (Belarus gas payments are due on 21-23 day of the following month). Accordingly, Belarus underpaid for gas in September (for August) as well. Therefore, it is likely that Belarus is trying to negotiate a deferment of payment of not only an already existing debt, but also of the overall amount of payment due for future deliveries in the remaining 3 months.

Comment

The statistics says Russia has shipped about 13.4 billion cubic meters of gas during the past 8 months of 2011. The average price was USD 246. Therefore in January – August Belarus had to pay almost USD 3.2 billion to “Gazprom”, or USD 400 million per month on average. With the commencement of the heating season, gas consumption increases by more than twice therefore the deferral of payments will enable the country to make substantial savings, critical for the treasury at the moment. As well it will bring down the foreign currency demand, affecting the overall balance of supply and demand of foreign currencies and the ability of the National Bank to inhibit the USD exchange rate growth.