Sochi meeting: bilateral rapprochement without a breakthrough

The meeting of the Belarusian and the Russian Presidents in Sochi on February 7^th came to naught, the parties only confirmed their positions. Russia has remained unwilling either to lower the price of gas or discuss compensation for the tax maneuver. Belarus has opposed Russia’s approach. Equally, there was no progress with the integration roadmaps.

Meanwhile, judging by what Kozak and Kruty have said, there was some bilateral rapprochement. Firstly, as regards the price of gas, Belarus has agreed to a “base price option” for March-December 2020 at USD 127 per thousand cubic meters. In 2018-2019, Belarus was buying gas in Russia at USD 127 per thousand cubic meters, but a) over the past two years, gas prices in Europe lowered in general, including for gas supplied by Gazprom and b) as a compensation of the inflated gas price, Belarus retained the oil export duties for 6 million tons of oil in her budget. Belarus had disagreed to continue to buy gas at prices of 2018-2019, hoping either for a discount or for the continuation of the scheme with the oil export duties. However, judging by what Kruty and Kozak said, Belarus had abandoned her claims regarding the price of gas.

Secondly, as regards, oil, Russia apparently said that as a state it would not force Russian companies to supply oil to Belarus either with a premium (to which Belarus had opposed) or without it. In addition, deliveries would continue to be duty-free (in 2020, oil without duties will be 17% cheaper than in Poland). Moreover, apparently, Belarus has achieved that Transneft would export to Belarus as for the domestic market. In practice, this would mean that Belarus may buy oil from small Russian oil producers without a premium price and duty-free.

If the parties conclude agreements on the principles which were quoted by Kruty, then the agreement on gas will be on Russia’s terms, and oil would base on a compromise.

By Valeria Kostyugova