January 11, 2007

Russia to impose duties on Belarusian imports
 

Natural gas supplies to Europe might be disrupted this winter because of a dispute between Russia and Belarus.

Russia might even impose a hefty duty on more than half of Belarusian imports, reported the "Vedomosti" business daily. Goods could include meat and meat products, milk and dairy  products among others.

Apparently, the previous duty-free regime has been costing the Russian budget up to US$4 billion a year. The revised duty could be worth US$6 billion, the newspaper quoted an unnamed source as saying.

Russia stopped pumping oil to Europe on Monday, Jan 8 via the Druzhba, or Friendship, pipeline that crosses Belarus, accusing its neighbour of siphoning off oil.

The second Russian-related energy stoppage to affect the EU in 12 months intensified European concerns about reliance on Russian oil and gas and prompted criticism by EU leaders.

A delegation led by Belarusian vice-Premier Andrei Kobyakov flew to Moscow to find a solution to the oil stoppage, which has affected Ukraine, Germany, Poland, Hungary, the Czech Republic and Slovakia.

Russian President Vladimir Putin ordered his government to work out a set of measures aimed at Belarus to protect the national economy.

Putin also ordered his Cabinet to consider a possible reduction in oil output, an indication the standoff could drag on. Russia has a limited capacity for refining oil and would have to cut crude output if its exports fall suddenly.

Talks between Belarus and Russia broke up in failure after Russian officials insisted that Belarus annuls an oil transit fee it announced in retaliation for Russia's imposition of a hefty duty on exports of oil to Belarus.