Last year, Minsk paid $30 per 1,000 cubic meters. Ukraine, by contrast, pays $50 per unit, and on Western markets the price shoots up to $132.
Russian Finance Minister Aleksei Kudrin said maintaining artificially low rates for Belarus would amount to direct losses for Russian energy giant Gazprom. Although Moscow and Minsk have yet to revise the deal, there seems little doubt the price is set to go up -- a dire prospect for Belarus and its beleaguered economy.
Russian President Vladimir Putin, speaking today during a televised cabinet meeting, said Belarus would no longer receive subsidized gas supplies. But he added that Russia could provide loans to alleviate the difficulties the price hike may provoke. "I discussed this issue with the head of our government [Prime Minister Mikhail Kasyanov] and asked him to examine the possibility of extending government credits so that Belarusian household consumers don't have any problems."
Gazprom says it wants Minsk to pay $46 per 1,000 cubic meters or risk a supply cut-off. Gazprom ceased gas deliveries to Belarus at the start of the new year, but approved sales by the independent producers Itera and TransNafta.
Even these suppliers, however, have announced they will stop. Now Minsk has until 29 January to resolve the question of where the country's natural gas supply will come from -- and how much it will cost. At the same time, it is struggling to extract what it says is a fair price from Gazprom for shares in the Beltransgaz pipeline operator.
Analysts are calling it the "gas war," and say it is too early to tell who the winner will be.
Oleg Manayev heads the Minsk-based independent Institute for Socioeconomic and Political Studies. He says Belarusian authorities have several ways to resist the Gazprom advance. The first would be finding the money needed to pay the higher gas prices and survive the few remaining months of winter. "The most important thing for Belarusian authorities now is to win time," Manayev says. "That means to survive the winter. In our situation, that means until the end of March, or approximately two more months."
Manayev says Russia's March presidential elections may help. He says Putin is less likely to submit to political wrangling with his Belarusian counterpart Alyaksandr Lukashenka -- and risk angering Russian supporters of the proposed Russia-Belarus Union -- until the ballot is over. "Nobody knows what will happen after the March elections," Manayev says, "and that's why many in Belarus would like to postpone the final solution."
Nikolai Petrov is an analyst with the Carnegie Moscow Center. He says the Russian-Belarus Union has lost momentum in recent years and is not a major issue for Russian voters. To the contrary, he says, most Russians would support the notion of forcing Minsk to pay the same gas rates as other countries in the region.
The Russia-Belarus Union does not dominate Russian foreign policy, he says. Russians support "taking a pragmatic and tough position toward the CIS countries on energy prices. The majority of the population doesn't think that serious economic concessions should be made for the sake of a union -- or, moreover, for the sake of some vague ideas about the union which were announced many years ago and have since lost their value."
But Manayev says Belarusian authorities, if forced to pay higher rates, may resort to what he calls the "Ukrainian" approach -- turning a blind eye as local suppliers illegally siphon off gas from pipelines passing through the country en route to the West. The gas war illustrates the difficult situation facing Minsk under the leadership of a president who wants from Moscow both independence and Soviet-style subsidized gas. Manayev says it is not only Lukashenka who sees no apparent contradiction in these demands -- most Belarusians feel the same as well.
A recent poll shows that 72 percent of Belarusians support independence over the status of a Russian province. At the same time, more than 50 percent favor an economic union with Russia. A majority of Belarusians also support membership in NATO or the European Union. Such apparent confusion, says Manayev, comes from what he calls "a very weak sense of national self-identity." At the same time, he says, anger at Lukashenka is growing.
"This is in the realm of fantasy, but let's imagine what would happen if the winter lasted the whole year. I think the patience of the Belarusians wouldn't last that long. This hypothesis is based on the fact that the majority of polls, conducted not only by our institute but others as well, indicate that Belarusian society's level of discontentment with the current foreign and economic policy is rather high, and is growing," Manayev said.