In H1 2015 oil supplies to Belarus will not reduce

In January – February 2015, Belarus supplied 140 thousand tons of petrol to the Russian market with annual supply volume agreed at 1.8 million tons. In March, Belarus stopped petrol supplies.

According to the agreements with Russia, if Belarus fails to supply petrol according to the plan, Russia may reduce oil supplies in the amount of 5 tons per ton of undersupplied oil products. However, due to changes in the refinery economy, Russia will not apply restrictive measures to Belarus. In 2015, Belarus, therefore, might maintain petroleum products production volumes at the level of 2014. Nevertheless, financial health of the Belarusian refineries might deteriorate. Firstly, due to falling oil prices, and secondly, due to the increased demand of the government to transfer refineries’ funds to the budget. On the domestic market, the cost of fuel is no longer tied to the US dollar, but fuel prices will not be reduced due to the need to supplement the budget in 2015.